### Investment Project AnalysisAn investment project provides the following annual cash inflows over four years respectively: $2,800, $3,700, $5,100, and $4,300. The discount rate applied is 9 percent. We are required to determine the discounted payback period for different initial costs.#### Questions:a. **What is the discounted payback period for these cash flows if the initial cost is $5,200?** *(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)*b. **What is the discounted payback period for these cash flows if the initial cost is $6,400?** *(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)*c. **What is the discounted payback period for these cash flows if the initial cost is $10,400?** *(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)*#### Summary Table:| **Question** | **Discounted Payback Period** ||----------------------------------|-------------------------------|| a. Discounted payback period | ______ years || b. Discounted payback period | ______ years || c. Discounted payback period | ______ years |#### Explanation of Graphical Content:In the summary table above, we need to fill in the values of the discounted payback period for each respective initial cost. Each row corresponds to a different initial cost provided in the questions. The columns are designed to capture the answers, in years, for each discounted payback period. This analysis helps in understanding at what point the initial investment is recovered, considering the time value of money.

The payback period method is a very important technique used in capital budgeting for assessing…

Answered: An investment project has annual cash…

An investment project has annual cash inflows of $2,800, $3,700, $: for the next four years, respectively. The discount rate is 9 percent.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

### Investment Project Analysis

An investment project provides the following annual cash inflows over four years respectively: $2,800, $3,700, $5,100, and $4,300. The discount rate applied is 9 percent. We are required to determine the discounted payback period for different initial costs.

#### Questions:

a. **What is the discounted payback period for these cash flows if the initial cost is $5,200?**
*(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)*

b. **What is the discounted payback period for these cash flows if the initial cost is $6,400?**
*(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)*

c. **What is the discounted payback period for these cash flows if the initial cost is $10,400?**
*(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)*

#### Summary Table:

| **Question** | **Discounted Payback Period** |
|----------------------------------|-------------------------------|
| a. Discounted payback period | ______ years |
| b. Discounted payback period | ______ years |
| c. Discounted payback period | ______ years |

#### Explanation of Graphical Content:

In the summary table above, we need to fill in the values of the discounted payback period for each respective initial cost. Each row corresponds to a different initial cost provided in the questions. The columns are designed to capture the answers, in years, for each discounted payback period. This analysis helps in understanding at what point the initial investment is recovered, considering the time value of money.

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