Final answer:
The question concerns calculations of payback period and discounted payback period for an investment, applying the concepts of the time value of money and present value calculations.
Step-by-step explanation:
The student's question relates to the calculation of the payback period and the discounted payback period for a capital project, with a specific rate of return requirement. Although the exact cash flows are not mentioned in the problem provided, the payback period refers to the amount of time it takes for the initial investment to be recovered from the project's cash flows. The discounted payback period is similar, except that it considers the time value of money by discounting the cash flows at the given rate, in this case, 8%.
For a simple two-year bond example, we can demonstrate the present value calculations for both scenarios of discount rates at 8% and 11%. These calculations can be understood using the Present Value (PV) formula: PV = Cf / (1 + r)^n, where Cf is the cash flow in a given period, r is the discount rate, and n is the number of periods.