f. What is the regular payback period for these two projects? Project A Intermediate calculation for...

 

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f. What is the regular payback period for these two projects? Project A Intermediate calculation for payback Payback using intermediate calculations Project B WACC = Time period Cash flow Cumulative cash flow Project A Time period Cash flow Cumulative cash flow Project B 12% Disc. cum. cash flow Intermediate calculation for payback Payback using intermediate calculations Time period Cash flow 0 Disc. cash flow Disc. cum. cash flow (375) Time period 0 Cash flow Disc. cash flow Intermediate calculation for payback Payback using intermediate calculations Discounted Payback using PERCENTRANK (375) 0 (575) (575) (375) (375) (375) 1 Intermediate calculation for payback Payback using intermediate calculations Payback using PERCENTRANK Ok because cash flows follow normal pattern. g. At a cost of capital of 12%, what is the discounted payback period for these two projects? 0 (575) (575) (575) (300) (675) 1 $190 (385) 1 (300) (268) (643) 2 1 190 170 (405) (200) (875) 2 $190 (195) 2 (200) (159) (802) 2 190 151 (254) 3 (100) (975) (375) 4 5 600 $600 225 3 4 $190 $190 (5) 185 3 (100) (71) (873) 5 $190 375 3 4 190 190 135 121 (119) 2 6 $926 4 5 6 600 $600 $926 1,151 381 340 469 (492) (152) 317 108 110 6 $190 565 Ok because cash flows follow normal pattern. 5 6 $190 $190 96 206 7 ($200) 951 7 SO 565 7 ($200) (90) 227 7 SO 0 206 f. What is the regular payback period for these two projects? Project A Intermediate calculation for payback Payback using intermediate calculations Project B WACC = Time period Cash flow Cumulative cash flow Project A Time period Cash flow Cumulative cash flow Project B 12% Disc. cum. cash flow Intermediate calculation for payback Payback using intermediate calculations Time period Cash flow 0 Disc. cash flow Disc. cum. cash flow (375) Time period 0 Cash flow Disc. cash flow Intermediate calculation for payback Payback using intermediate calculations Discounted Payback using PERCENTRANK (375) 0 (575) (575) (375) (375) (375) 1 Intermediate calculation for payback Payback using intermediate calculations Payback using PERCENTRANK Ok because cash flows follow normal pattern. g. At a cost of capital of 12%, what is the discounted payback period for these two projects? 0 (575) (575) (575) (300) (675) 1 $190 (385) 1 (300) (268) (643) 2 1 190 170 (405) (200) (875) 2 $190 (195) 2 (200) (159) (802) 2 190 151 (254) 3 (100) (975) (375) 4 5 600 $600 225 3 4 $190 $190 (5) 185 3 (100) (71) (873) 5 $190 375 3 4 190 190 135 121 (119) 2 6 $926 4 5 6 600 $600 $926 1,151 381 340 469 (492) (152) 317 108 110 6 $190 565 Ok because cash flows follow normal pattern. 5 6 $190 $190 96 206 7 ($200) 951 7 SO 565 7 ($200) (90) 227 7 SO 0 206

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