Problem:
An investment project has annual cash inflows of $5,000, $5,500, $6,000, & $7,000. and a discount rate of 14 %.
Required:
Question 1: What is the discounted payback period for these cash flows if the initial cost is $8,000?
Question 2: What if the initial cost is $12,000? What if it is $16,000?
Note: Provide support for rationale.