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N investment project costs $10,000 and has annual cash flows of $2,940 for six years. what is the discounted payback period if the discount rate is 0 percent?

User Yuda
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1 Answer

6 votes
is this what you're asking?
given PW = AW×( ((1+i)^n - 1) ÷ (i×(1+i)^n) )

where we're finding i
and we know
PW = $10000
AW = $2940
n = 6

because we get i = 0.190981

and using that we find FW in
FW = -PW×(1+i)^n + AW×( ((1+i)^n - 1) ÷ i)

where
PW = $10000
AW = $2940
n = 6

we get FW = $0.03 approx $0

where i = 0, n is infinity... just look at the equations. if there is a discount rate of 0%, the discounted payback period is infinite

User Ichistmeinname
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