Reference no: EM132554031

Question 1. Klein Pharmacy has a project which has the following cash flows.

Year 0 = -$200,000

Year 1 = $50,000

Year 2 = $100,000

Year 3 = $150,000

Year 4 = $40,000

Year 5 = $25,000

The cost of capital is 10%. What is the project's discounted payback?

a 1.88 years

b 2.00 years

c 2.33 years

d 2.48 years

e 2.64 years

Question 2. Klein Pharmacy has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the form $150,000 today, and the firm's cost of capital is 10%. What is the discounted payback for this investment?

a 5.23 years

b 4.86 years

c 9.28 years

d 6.75 years

e 4.00 years

f 6.12 years

g 4.35 years