Answer:
2.99 years
Explanation:
Discounted payback calculated how long it takes to recover the amount invested in a project from its discounted cash flows.
Amount invested = $-18,400
Discounted cash flow in year 1 = 7200 / 1.135 = $6,343.61
Discounted cash flow in year 2 = 8900 / 1.135^2 = $6908.73
Discounted cash flow in year 3 = 7600 / 1.135^3 = $5197.88
in year 1, the amount recovered = $-18,400 + $6,343.61 = $-12,056.39
in year 1, the amount recovered = $-12,056.39 + $6908.73 = $-5147.66
in year 1, the amount recovered = $-5147.66 + $5197.88 = $50.2
the payback period = 2 years + $-5147.66 / $5197.88 = 2.99 years
