Target Corporation (TGT) is considering a new delivery system that costs $194,875. Assume a required rate of return of 4.26% and thefollowing cash flow schedule:Year 1: $46,608.Year 2: $70,559Year 3: $95,705Year 4: $11,450The project's discounted payback period (DPP) is closest toO A. 2.08 years.OB. 2.19 years.OC. 2.31 years.COD. 2.44 years.

Step 1: Calculate the Present Value (PV) of each year's cash flow.Use the formula:PV = Cash Flow /…

Answered: Target Corporation (TGT) is considering…

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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Calculate the payback period, the discounted payback period and the NPV for the following project using a rate of 5%. Time Cash Flow 0 - $53,000 1 $ 21,000 2 $ 21,000 3 $ 21,000 NPV = Payback = Discounted Payback =
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