Final answer:
The Payback Period for the proposed expansion is just before the end of Year 4. Without a discount rate, the Discounted Payback Period and NPV cannot be calculated here, but methodologies for their calculations have been explained.
Step-by-step explanation:
The question involves calculating the Payback Period, Discounted Payback Period, and Net Present Value (NPV) for a proposed overseas expansion project based on given cash flows.
To calculate the Payback Period, we sum the cash inflows year by year until the initial investment is recovered. In this case:
- Year 1: -$200 + $50 = -$150 (still not recovered)
- Year 2: -$150 + $60 = -$90 (still not recovered)
- Year 3: -$90 + $70 = -$20 (still not recovered)
- Year 4: -$20 + $200 = $180 (investment is recovered by year 4)
The Payback Period is therefore just before the end of Year 4.
To calculate the Discounted Payback Period, we need to discount each cash inflow to its present value at a specific discount rate, which has not been provided in the question. Assuming we had the discount rate, we would perform a similar process as the Payback Period, but using discounted cash flows until the initial investment is recovered.
The NPV is calculated by discounting all future cash flows to their present value and subtracting the initial investment. Without a discount rate, we cannot calculate the exact NPV, but the generic formula is NPV = (CF1/(1+r)^1) + (CF2/(1+r)^2) + (CF3/(1+r)^3) + ... - Initial Investment, where CF is the cash flow and r is the discount rate.