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 Discounted Payback Period 
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Joined: 26 Feb 2013
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I feel like the CFA curc. isn’t helping me here…seems like such an easy thing to do…If someone can give me a sentence exp., that would be great.
me = burned out?
Thanks!


15 Mar 2013
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Joined: 26 Feb 2013
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http://www.exinfm.com/board/discounted_payback.htm


15 Mar 2013
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Joined: 26 Feb 2013
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Great…Thank you for the quick response


15 Mar 2013
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Joined: 26 Feb 2013
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Shodz, are you studying for June 09?


15 Mar 2013
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The discounted payback method is simply discounting each year’s cash flow at the discount rate until those discounted cash flows sum up to the initial cash outflow.
The brief description courtesy of my notes, I’m not sure how much it will help though.
The payback period is the number of years it will take to recover the original investment. The disadvantage is that it ignores the time value of money and the cash flows received after the payback period.
The discounted payback period is similar to the payback period except that the cash flows are discounted by the project’s cost of capital. It still ignores cash flows received after payback.


15 Mar 2013
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Conquistador07 Wrote:
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If it’s discounting at cost of capital how can it
avoid TVM?
Payback period avoids the TVM, but discounted payback solves the problem and does take into consideration the TVM, which for all intensive purposes is the difference between the two.


15 Mar 2013
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Shakespeare…Yes, I am


15 Mar 2013
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If you have a BA II Plus Pro you can just enter in the cash flows and it’ll calculate it for you.


15 Mar 2013
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bpdulog Wrote:
——————————————————-
If you have a BA II Plus Pro you can just enter in
the cash flows and it’ll calculate it for you.
that’s cheating…haha jk


15 Mar 2013
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Thank you CFA forum for sharing this great post share on Discounted Payback Period and also about the ukbestessays. Learning all about the payback period was really helpful and informative, thanks for the share here.


15 Aug 2018
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