Question - The estimated receipts and disbursements for a new project are shown below. MARR is 10% per year compounded annually.
|
End of Year
|
0
|
1
|
2
|
3
|
4
|
5
|
|
Receipts
|
0
|
$6,000
|
$6,000
|
$7,000
|
$7,000
|
$7,000
|
|
Disbursements
|
$10,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
a) Compute the payback period for this new project.
b) Determine the discounted payback period (DPBP) for this new project. It is enough if you determine in which year the DPBP falls.