Your division is considering an investment projects which requires an up-front expenditure of $80 million. You estimate that the cost of capital is 9.00% and that the investments will produce the following after-tax cash flows (in millions of dollars): Year012345CF in millions-802021322419What is the discounted payback period for this project? 4.18 2.36 5.90 9.89 6.55

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Your division is considering an investment projects which requires an up-front expenditure of $80 million

Finance Nov 18, 2020

Your division is considering an investment projects which requires an up-front expenditure of $80 million. You estimate that the cost of capital is 9.00% and that the investments will produce the following after-tax cash flows (in millions of dollars):
Year012345CF in millions-802021322419What is the discounted payback period for this project?
4.18
2.36
5.90
9.89
6.55

Expert Solution

So, the correct option is 1st "4.18 years".

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