To : The Assistant Financial Controller

From : Mr C$.$ Y$.$ Charles $,$ Managing Director $,$ Mane Products Incorporated

Reference : Capital Budgeting Analysis

Provide an evaluation of two proposed projects, both with $5-$year project lives and identical cash outflows of $$110,000.$ Both these projects involve additions to Mane$$s highly successful Beza product lines. The required return on both projects has been established at $12\%.$

The expected after$-$tax cash flows from each project are as follows :

Project A

Project B

Initial cash outflow

$-$$$110,000$

$-$$$110,000$

Year $1$

$$20,000$

$$40,000$

Year $2$

$$30,000$

$$40,000$

Year $3$

$$40,000$

$$40,000$

Year $4$

$$50,000$

$$40,000$

Year $5$

$$70,000$

$$40,000$

What is the cash payback period and the discounted cash payback period on each project?