# An investment project costs $10,000 and has annual cash flows of $2,900 for six years. What is

## Question:

An investment project costs $10,000 and has annual cash flows of $2,900 for six years. What is the discounted payback period if the discount rate is zero percent? What if the discount rate is 5 percent? If it is 19 percent?

Discount RateDepending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Payback Period

Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...

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**Related Book For**

## Fundamentals of corporate finance

**ISBN:** 978-0078034633

10th edition

**Authors:** Stephen Ross, Randolph Westerfield, Bradford Jordan