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A company has two projects to choose from with the following annual after-tax cash flows: Project X Investment (today) Investment (Year 1) Years 2-5

A company has two projects to choose from with the following annual after-tax cash flows: Project X Investment (today) Investment (Year 1) Years 2-5 $800,000 $500,000 $750,000 Project Y Investment (today) $1,800,000 Years 1-5 $950,000 The firm's cost of capital is 12 percent. Compute both projects' payback period and discounted payback period. (4 marks) Question 1 (4 marks) Payback Period: PROJECT X PROJECT Y Discounted Payback Period: PROJECT X PROJECT Y

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