Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.00% Year 0 1 2 3 4 Cash flows -$700 $525 $485 $445 $405
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We can do this using the formula: Discounted Cash Flow = Cash Flow / (1 + WACC)^n where n is the year. Year 0: Discounted Cash Flow = -$700 / (1 + 0.10)^0 = -$700 Year 1: Discounted Cash Flow = $525 / (1 + 0.10)^1 = $525 / 1.10 = $477.27 Year 2: Discounted Show more…
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