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Project Cash Flows A B C D -$2,500 -$6,000 -$13,000 -$14,500 1 $600 $2,500 $3,000 $6,000 $500 $1,000 $4,000 $9,000 3 $500 $1,500 $5,000 -$4,000 4 $700 $500 $6,000 $5,000 $800 $500 $7,000 $1,000 6. $400 $1,500 $2,000 7 $400 $3,000 8. $400

Project Cash Flows A B C D -$2,500 -$6,000 -$13,000 -$14,500 1 $600 $2,500 $3,000 $6,000 $500 $1,000 $4,000 $9,000 3 $500 $1,500 $5,000 -$4,000 4 $700 $500 $6,000 $5,000 $800 $500 $7,000 $1,000 6. $400 $1,500 $2,000 7 $400 $3,000 8. $400

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
Section: Chapter Questions
Problem 1PS
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Consider the following cash flows, for four different projects: (given)

(a) Calculate the conventional payback period for each project.
(b) Determine whether it is meaningful to caJculate a payback period for Project D.
(c) Assuming i = I 0% calculate the discounted-payback period for each project.

Project Cash Flows A B C D -$2,500 -$6,000 -$13,000 -$14,500 1 $600 $2,500 $3,000 $6,000 $500 $1,000 $4,000 $9,000 3 $500 $1,500 $5,000 -$4,000 4 $700 $500 $6,000 $5,000 $800 $500 $7,000 $1,000 6. $400 $1,500 $2,000 7 $400 $3,000 8. $400
Transcribed Image Text:Project Cash Flows A B C D -$2,500 -$6,000 -$13,000 -$14,500 1 $600 $2,500 $3,000 $6,000 $500 $1,000 $4,000 $9,000 3 $500 $1,500 $5,000 -$4,000 4 $700 $500 $6,000 $5,000 $800 $500 $7,000 $1,000 6. $400 $1,500 $2,000 7 $400 $3,000 8. $400
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