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Consider the investment projects in Table P7, all of which have a four-y vestment life. TABLE P7 11 0 A -$2,500 Project's Cash Flow ($) B C -$3,500 -$2,800 D -$2,300 6100Y

Consider the investment projects in Table P7, all of which have a four-y vestment life. TABLE P7 11 0 A -$2,500 Project's Cash Flow ($) B C -$3,500 -$2,800 D -$2,300 6100Y

Essentials Of Investments
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
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7 Consider the investment projects in Table P7, all of which have a four-year in- vestment life. TABLE P7 11 0 1 2 3 4 A --$2,500 $0 $0 $0 $6.200 Project's Cash Flow ($) B C -$3,500 -$2,800 $1,600 -$1,800 $2,800 -$900 $3,500 $4,500 $2,200 $4,500 D -$2,300 -$1,000 $1,900 $2,300 $1,500 (a) What is the payback period of each project? (b) What is the discounted payback period at an interest rate of 15% for each project?
Transcribed Image Text:7 Consider the investment projects in Table P7, all of which have a four-year in- vestment life. TABLE P7 11 0 1 2 3 4 A --$2,500 $0 $0 $0 $6.200 Project's Cash Flow ($) B C -$3,500 -$2,800 $1,600 -$1,800 $2,800 -$900 $3,500 $4,500 $2,200 $4,500 D -$2,300 -$1,000 $1,900 $2,300 $1,500 (a) What is the payback period of each project? (b) What is the discounted payback period at an interest rate of 15% for each project?
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