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Discounted Payback Period – Given the following four projects and their cash flows, calculate the discounted payback period with a 5% discount rate, 10% discount rate, and 20% discount rate. What do you notice about the payback period as the discount rate rises? Explain this relationship.
| Projects | A | B | C | D |
| Cost | $10,000 | $25,000 | $45,000 | $100,000 |
| Cash Flow Year One | $4,000 | $2,000 | $10,000 | $40,000 |
| Cash Flow Year Two | $4,000 | $8,000 | $15,000 | $30,000 |
| Cash Flow Year Three | $4,000 | $14,000 | $20,000 | $20,000 |
| Cash Flow Year Four | $4,000 | $20,000 | $20,000 | $10,000 |
| Cash Flow year Five | $4,000 | $26,000 | $15,000 | $10,000 |
| Cash Flow Year Six | $4,000 | $32,000 | $10,000 | $0 |
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