Jennifer
$3,982,048
Correct!
Will the discounted payback
period be shorter or longer than
the payback period calculated
earlier?
They will be the same length.
Shorter
Longer
Submit
Nick
Monster Beverage is considering purchasing a new canning machine.
This machine costs $3,500,000 up front.
Required return = 11.3%
I
Year
Cash Flow
Discounted Cash Flow
A
$-3,500,000
$-3,500,000
1
$1,000,000
$898,473
2
$1,200,000
$968, 704
3
$1,300,000
$942,883
4
$900,000
$586,492
5
$1,000,000
$585,496