Question: Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 10%. 1 2 ZI!!!! 700 375 300 Project A -1,000 years 0 years Project B -1,000 What is Project A's payback? Do not round intermediate calculations. Round your answer to four decimal places. years 3 310 260 years 4 410 310 What is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. 760 What is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal places. What is Project B's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places.
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A The payback period for Project A is 214 ... View full answer
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