Question: Hello! I just need help with the discounted payback. Thanks! Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and
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. Deprecation, 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 8%. 0 1 2 3 700 290 440 340 790 Project A 1,200 400 Project 8 -3,200 300 335 What is Project A's payback Do not round Intermediate calculations, Round your answer to four decimal places. 2.34 years What is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. years What is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal places. 3.28 years What is Project B's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. years Check My Work (5 remaining)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
