Carol is hoping that an investment of $29,900 will provide additional revenue to the store of $18,000 per year for 3 years. Her partner in crime, Steven, is confident that a larger investment of $39,700 will be required to bring in a steady flow of $23,000 in new revenue per year for 3 years. Determine the discounted payback period for each investment (using before-tax cash flows). The company's required rate of return is 9%. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places e.g. 15.25.) Click here to view the factor table Discounted payback period Carol 1.42 years Steven 1.46 years
Carol is hoping that an investment of $29,900 will provide additional revenue to the store of $18,000 per year for 3 years. Her partner in crime, Steven, is confident that a larger investment of $39,700 will be required to bring in a steady flow of $23,000 in new revenue per year for 3 years. Determine the discounted payback period for each investment (using before-tax cash flows). The company's required rate of return is 9%. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places e.g. 15.25.) Click here to view the factor table Discounted payback period Carol 1.42 years Steven 1.46 years
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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Transcribed Image Text:Carol is hoping that an investment of $29,900 will provide additional revenue to the store of $18,000 per year for 3 years. Her partner
in crime, Steven, is confident that a larger investment of $39,700 will be required to bring in a steady flow of $23,000 in new revenue
per year for 3 years.
Determine the discounted payback period for each investment (using before-tax cash flows). The company's required rate of return is
9%. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places e.g. 15.25.)
Click here to view the factor table
Discounted payback period
Carol
1.42
years
Steven
1.46
years
0
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