Part $1(40$ points$)$

Create a user$-$defined function to solve for the discounted payback period. This is a tool that is used in capital

budgeting.

The simple payback period that we used in class ignores the time value of money. To counter this limitation$,$ an

alternative procedure called discounted payback period may be followed, which accounts for time value of

money by discounting the cash inflows of the project.

In discounted payback period we have to calculate the present value of each cash flow. For this purpose the

management has to set a suitable discount rate. The discounted cash inflow for each period is to be calculated

using the formula:

Discounted Cash Inflow $=\frac{\text{A}\text{c}\text{t}\text{u}\text{a}\text{l}\text{C}\text{a}\text{s}\text{h}\text{I}\text{n}\text{f}\text{l}\text{o}\text{w}}{(1+i{)}^n}$

Where,

$i$ is the discount rate;

$n$ is the period to which the cash inflow relates.

The rest of the procedure is similar to the calculation of simple payback period except that we have to use the

discounted cash flows as calculated above instead of actual cash flows. The cumulative cash flow will be

replaced by cumulative discounted cash flow.

Use your user$-$defined function to solve for the discounted payback period on the following project. You want

to be able to select the raw cash flows. The function should discount them and determine the discounted

payback period.