An Investment Project Has the Cash Flow Stream of $-3250,$80,$200,$75,and

question 57

Multiple Choice

An investment project has the cash flow stream of $-3250,$80,$200,$75,and $90. The cost of capital is 12%. What is the discounted payback period?

• A) 1.24 years
• B) 1.85 years
• C) 2.24 years
• D) 2.85 years
• E) 3.05 years

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Definitions:

Depreciation Expense

A financial accounting method used to allocate the cost of a tangible asset over its useful life.

Double-Declining-Balance

An accelerated method of depreciation that doubles the rate at which an asset's book value declines compared to the straight-line method.

Salvage Value

The calculated resale worth of an asset at the close of its efficient lifespan.

Depreciation

The allocation process of a tangible asset's cost over the period it is useful.