Discounted Payback: Roswell Energy Company Is Installing New Equipment at a Cost

question 48

Multiple Choice

Discounted payback: Roswell Energy Company is installing new equipment at a cost of $10 million. Expected cash flows from this project over the next five years will be $1,045,000, $2,550,000, $4,125,000, $6,326,750, and $7,000,000. The company's discount rate for such projects is 14 percent. What is the project's discounted payback period?

• A) 4.2 years
• B) 4.4 years
• C) 4.8 years
• D) 5.0 years

---

Definitions:

Malignant Hyperthermia

A severe reaction to certain anesthesia drugs, which is life-threatening and causes a rapid increase in body temperature and severe muscle contractions.

Anesthetic Agents

Substances used to induce anesthesia, typically causing a temporary loss of sensation or awareness.

Puncture-resistant Container

A type of secure container designed to safely dispose of needles, scalpels, and other sharp medical instruments.