What is the project discounted payback period

Reference no: EM13289605

MacHinery Manufacturing Company is considering a three-year project that has a cost of $75,000. The project will generate after-tax cash flows of $33,100 in Year 1, $31,500 in Year 2, and $31,200 in Year 3. Assume that the appropriate discount rate is 10% and that the firm's tax rate is 40%. What is the project's discounted payback period?

A) 2.81 years
B) 2.33 years
C) 1.22 years
D) The project never reaches payback.

Reference no: EM13289605

Questions Cloud

At what price should the annual payment bond sell : The firms Class Ann bonds have the same risk,maturity, nominal interest rate, and par value, but these bonds pay interest annually. Neither bond is callable. At what price should the annual payment bond sell?

Calculate the mirr of the project : Frazier Fudge has a project with an initial outlay of $40,000, followed by three years of annual incremental cash flows of $35,000. The terminal cash flow of the project is $10,000. Assuming a cost of capital of 10%, calculate the MIRR of the proj..

Find the minimum ampere rating of an electric heating system : To save on heating costs, the owner of a greenhouse keeps 580 kg of water around in barrels. What is the minimum ampere rating of an electric heating system

State extracting an aqueous solution with an organic solvent : If you are uncertain as to which layer in the separatory funnel is aqueous when extracting an aqueous solution with an organic solvent, how could you settle the issue

What is the project discounted payback period : Assume that the appropriate discount rate is 10% and that the firm's tax rate is 40%. What is the project's discounted payback period?

What is the impact of her capital gains and losses : If Serenity is single and has taxable income from other sources of $75,000, what is the impact of her capital gains and losses on her income tax liability?

Determine the magnitude of the tension in the rope : A block of weight 46.7 N is hanging from a rope. The tension in the rope is 32.5 N, pulling upward on the block. What is the magnitude of the tension in the rope

How would this affect their requird rate of return : Tucker Corporation is planning to issue new 20-year bonds. The current plan is to make the bonds noncallable, but this may be changed. If the bonds are made callable after 5 years at a 5% call premium, how would this affect their requird rate of r..

What will be the field strength from the wire : The electric field 25cm from a long wire carrying a uniform line charge density is 1.8kN/C. What will be the field strength 37cm from the wire

User Account

All Pages