Shannon Co. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's discounted payback? $\begin{array} { l c c c c c }
&r=10.00 \%\
\text { Year } &0& 1 & 2 & 3 & 4 \
\text { Cash flows } & - \$ 950 & \$ 525 & 485 & 445 & 405
\end{array}$

Question

Shannon Co. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's discounted payback? $\begin{array} { l c c c c c } 
&r=10.00 \%\
\text { Year } &0& 1 & 2 & 3 & 4 \
\text { Cash flows } & - \$ 950 & \$ 525 & 485 & 445 & 405
\end{array}$

Quizplus · Accepted Answer

$\begin{array}{lccccc}
\text { WACC. } & 10.00 \% \
\text { Year } & 0 & 1 & 2 & 3 & 4 \
 \text { Cash flows } & -\$ 950 & \$ 525 & \$ 485 & \$ 445 & \$ 405 \
\text { PV of CFs } & -\$ 950 & \$ 477 & \$ 401 & \$ 334 & \$ 277 \
\text { Cumulative CF } & -\$ 950 & -\$ 473 & -\$ 72 & \$ 262 & \$ 539 \
\text { Payback = 2.22 years } & - & - & - & 2.22 & -
\end{array}$

Shannon Co A) 161 Years B) 1

Shannon Co A) 161 Years
B) 1