Discussion
For that project at 10 per cent, the discounted payback period is nearest
Answer: C
Correct answer: 6 years
The receipts must now cover the interest as well, so \( 10{,}000 \times (P/A, 10\%, n) \) must reach 40,000. At five years the factor is 3.791, giving 37,910 - not enough; at six years it is 4.355, giving 43,553. Recovery therefore falls in the sixth year, two years later than the simple calculation suggested.
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