Question: Payback period was the earliest Select selection criterion. The select is a break-even calculation in the sense that if a project's cash flows come in

Payback period was the earliest Select selection criterion. The select is a break-even calculation in the sense that if a project's cash flows come in at the expected rate, the project will break even. The equation is: Number of Urecord corelate your Payback - years prior to + Case forwaaring full servery year full recovery The Select a project's payback, the better the project is. However, payback has 3 main disadvantages: (1) All dollars received in different years are given Select welght. (2) Cash flows beyond the payback year are lonored. (3) The payback merely indicates when a project's investment will be recovered. There is no necessary relationship between a given payback and investor wealth maximization. A variant of the regular payback is the discounted payback. Unlike regular payback, the discounted payback considers -Select costs. However, the discounted payback still disregards cash flows Select the payback year. In addition, there is no specific payhack rule to Justity project acceptance. Both methods provide Information about Select and risk Quantitative Problem: Bellinger Industries is considering two projects for indusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash Mows are shown on the time line below. Depreciation, salvage valdos, net operating working capital requirements, and tax effects are all Included in these cash flow, both projects have 4 year lives, are they have rlok characteristics imitar to the firm's average project, Bellnger's WACC is 11%. 0 2 3 Project A Project B -1.100 -1,100 650 250 425 360 220 370 270 720 What is Project A payback? Do not round intermediate calculations, Round your answer to four decimal places 1 2 3 Project A Project 1,100 -1,100 650 250 425 360 220 370 270 720 What is Project A's payback? Do not found intermediate calculations. Round your answer to four decimal places. years What is Project A's discounted payback? Do not round intermediate calculations, Round your answer to four decimal places years What is Project D's payback? Do not round Intermediate calculations, Round your answer to four decimal places. years What is Projectes discounted payback? Do not round Intermediate calculations. Round your answer to four decimal places Years

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