Lew Iss See Kay LLP (LISKL) is currently evaluating an investment in a new comedy club. The club is expected to last for 4 years and generate a CF1 = $11,000, CF2 = $9,680, CF3 = $10,648, and CF4 = $45,454. The initial outlay is $20,000. Suppose a company has proposed a new 4-year project. The project has an initial outlay of $66,000 and has expected cash flows of $19,000 in year 1, $23,000 in year 2, $28,000 in year 3, and $34,000 in year 4. The required rate of return is 12% for projects at this company. What is the discounted payback for this project?

Lew Iss See Kay LLP (LISKL) is currently evaluating an investment in a new comedy club. The club is expected to last for 4 years and generate a CF1 = $11,000, CF2 = $9,680, CF3 = $10,648, and CF4 = $45,454. The initial outlay is $20,000. Suppose a company has proposed a new 4-year project. The project has an initial outlay of $66,000 and has expected cash flows of $19,000 in year 1, $23,000 in year 2, $28,000 in year 3, and $34,000 in year 4. The required rate of return is 12% for projects at this company. What is the discounted payback for this project?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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