Dhofar water is installing new equipment at a cost of 140000 OMR. Expected cash flows from this project over the next three years will be 95000 OMR , 80000 OMR and 65000 OMR. The company's discount rate for such projects is 10 percent. What is the project's discounted payback period?

Dhofar water is installing new equipment at a cost of 140000 OMR. Expected cash flows from this project over the next three years will be 95000 OMR , 80000 OMR and 65000 OMR. The company's discount rate for such projects is 10 percent. What is the project's discounted payback period?

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

Dhofar water is installing new equipment at a cost of
140000 OMR. Expected cash flows from this project
over the next three years will be 95000 OMR , 80000
OMR and 65000 OMR. The company's discount rate
for such projects is 10 percent. What is the project's
discounted payback period?
Select one:
О а. 1.63 years
ОБ. 1.81 уеars
О с. 2.82 years
O d. None of these
О е. 1.44 years

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