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    ctippy Posts: 4, Reputation: 1
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    #1

    Feb 17, 2011, 04:24 PM
    Discounted payback vs. payback period
    IN Finance: RE: Discounted payback period and payback period:
    What would have to be true for the discount period to be shorter than the payback period?

    I understand both the payback period (2 years, to recoup the investment)and the discounted payback period ( say 10%, 3 years to recoup the investment), but can not see a way for the payback period to be greater than the discounted payback period...
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    ctippy Posts: 4, Reputation: 1
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    #2

    Feb 19, 2011, 03:20 PM
    I asked a question on 2/17/11... It's called: Discounted payback vs. Payback
    I was asking when would a "discounted payback period" be shorter than the "Payback period" On an investment?
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    ctippy Posts: 4, Reputation: 1
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    #3

    Feb 19, 2011, 03:30 PM
    This is a trivia question from the finance college course.. payback period
    Ok, he calls this the "brain teaser" : What would have to be true for the discounted payback period to be shorter than the payback period? The example he had just shown us involved: investment: -100,000 year 1: 55,000 2: 45,000 3: 35,000 4: -25000
    PV of cash flow: -100,000 year1: 50,000 2: 37190 3: 26,296 4: -17,075

    I understand the math to each figure, but if you have $2 and you discount it , say .30, then the discount- will always be less that the starting amount ($2). Remember, he just showed us how to figure this out. So we know nothing else.
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