An investment project has an initial cost of $260 and cash flows $75, $105, $100, and $50 for Years 1 to 4, respectively. The cost of capital is 12 percent. What is the discounted payback period

It will take 2 years and 292 days.

Explanation:

Giving the following information:

An investment project has an initial cost of $260 and cash flows $75, $105, $100, and $50 for Years 1 to 4.

The payback method of project analysis calculates the time necessary for a series of cash flows to "payback" the initial investment.

Io= -260

Year 1= 75= - 185

Year 2= 105= -80

Year 3= 100= 20

To calculate the number of days:

Days= (80/100)*365= 292

It will take 2 years and 292 days.

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