Below is a table of Cash flow estimates given Turnkey purchases another type of equipment. Complete the
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Question:
- Below is a table of Cash flow estimates given Turnkey purchases another type of equipment.
- Complete the table below using the Discounted Payback Period. Assume the wacc=8%
Year | Cash Flow | PV Cash Flows | Cumulative |
0 | -22,000 | ||
1 | 0 | ||
2 | 16,000 | ||
3 | 13,000 | ||
4 | 10,000 |
- What is the Discounted Payback Period? _____
- Assume management wants its money back within 3.5 years. Assume wacc=8%. Would Turnkey management accept this project if they used the Discounted Payback Method? _______Explain.
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
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