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What the discounted payback period of the new store

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Reference no: EM133060939

Question - Stewart' Hobby Hub is considering putting up another comic book store in a newly opened community mall. The cost of putting up the new store is about $425,000. He estimates the following cash flows from the new store over the next four years:

Year 1 - $86,500

Year 2 - $134,000

Year 3 - $224,000

Year 4 - $204,000

Given a 10% discount rate, what the discounted payback period of the new store?

A. 3.3 years

B. 2.1 years

C. 3.9 years

D. 2.9 years

Reference no: EM133060939

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