Question 25 1 point Fernando Designs is considering a projec

Question 25 (1 point) Fernando Designs is considering a project that has the following cash flow and WACC dats. What is the project\'s discounted payback? WACC: 10.00% Year Cash flows 0 -$650 $500 $500 $500 1.62 years 1.58 years 1.15 years 1.47 years 1.24 years Save Page 5 of 10 Next Page Previous Page

Solution

discounted payback = 1 + 195.45/413.22 = 1.47 years

Discount rate	10.0000%
Cash flows	Year	Discounted CF= cash flows/(1+rate)^year	Cumulative cash flow
(650.00)	0	(650.00)	(650.00)
500.000	1	454.55	(195.45)
500.000	2	413.22	217.77
500.000	3	375.66	593.43