Question: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $261,339 $15,269 1 25,300 4,848 2 52,000 8,223 3 54,000

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 $261,339 $15,269
1 25,300 4,848
2 52,000 8,223
3 54,000 13,542
4 406,000 9,270

Whichever project you choose, if any, you require a 6 percent return on your investment.

Required:
(a) What is the payback period for Project A?

(b) What is the payback period for Project B?

(c) What is the discounted payback period for Project A?

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