Problem:
An investment project has annual cash inflows of $3,200, $4,100, $5,300, and $4,500, and a discount rate of 14 percent.
Required:
Question 1: What is the discounted payback period for these cash flows if the initial cost is $5,900?
Question 2: What is the discounted payback period for these cash flows if the initial cost is $8,000?
Question 3: What is the discounted payback period for these cash flows if the initial cost is $11,000?
Note: Provide support for your underlying principle.