The discounted payback is [tex]4.40[/tex] years.
Discounted payback:
- The discounted payback period is a capital budgeting technique used to evaluate a project's profitability. By discounting future cash flows and taking into account the time value of money, a discounted payback period calculates how many years it will take to recover the initial investment.
- Absolute value of discounted cash flows over all of period y. Make a table with columns for the periods, cash flows, discounted cash flows, and cumulative discounted cash flows in order to compute the DPP.
Project L costs [tex]$=\$ 350,00$[/tex]
Discounted pay Back period[tex]$=4$[/tex] years [tex]$+\frac{\$ 350,00-\$ 32,397}{\$ 6,499}$[/tex] (D.P.B.P.)
D.P.B.P =[tex]4[/tex] yeas [tex]+\frac{\$ 2603}{\$ 6499} \\[/tex]
D.P.B.P =[tex]4[/tex] years[tex]+0.400[/tex] year.
D.P.BP [tex]=4.40[/tex] years.
Discounted payback= [tex]=4.40[/tex] years.
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