Another Q expected, investment, initial, discounted

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If I have a project with NPV of 100 millions and the project is expected to last 8 years generating 50 millions a year, what is its discounted payback period???

I dont know how to get the initial investment in order to be able to calculate the Discounted Payback...

kasinkei

say rate = 10%

50/1.1 = 45.45
50/1.1^2 =41.32

total covered = 86.77

50/1.1^3 = 37.56 --> total covered = 124.33 > 100

so DPB = 2 + (100-86.77)/ (124.33-86.77) = 2.352

(Linear interpolation for approximation).

CP

draz

Thank You CP you are really helpful

LokiDog2

just thought about it a little more - since you have 50 Mill payout - and 100 Mill was NPV - it has to be a DPB between 2 and 3 years. (irrespective of the rate of return assumed).

CP