Question: I have the answer but can you please explain how they got the amounts for Discounted CF and Cumulative Discounted CF? Thanks. 7. ACME Inc.

I have the answer but can you please explain how they

got the amounts for Discounted CF and Cumulative Discounted CF? Thanks. 7.

ACME Inc. is considering a project that has the following cash flow

I have the answer but can you please explain how they got the amounts for Discounted CF and Cumulative Discounted CF? Thanks.

7. ACME Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC 11.00% Year 4 Cash flows -$1.125 $490 $520 $520 520 What is the problem with discounted payback? Why do people still use discounted payback? 11 .00% WACC: Year0 2 4 Cash flows -$1,125 S490 S520 S520 $520 Discounted CFs -$1,125 $441 $422 S380 S343 Cumulative discounted CF -$1,125-S684 -$262 $119 $461 2.69 Payback 2 years+portion of year3 Payback- 2+ (S262/ S380) Payback 2.69

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