Activity to calculate Payback Period and choose a project based on results. Year0 Year1 Year2 Year3 Year4 Discount Rate = 8% Project1 Discount Factor 1.00 0.93 0.86 0.79 0.74 Costs $120,000 $100,000 $75,000 $50,000 $50,000 Total Discount Costs $120,000 Benefits $0 $93,000 $64,500 $39,500 $60,000 $100,000 $120,000 $180,000 $37,000 $354,000 Discount Benefits $0 $55,800 $86,000 $94,800 $133,200 $369,800 Cash Flow Net Cash Flow Project2 Discount Factor 1.00 0.93 Costs $75,000 0.86 $90,000 $30,000 $30,000 $20,000 0.79 0.74 Discount Costs 75,000 Benefits $0 83,700 25,800 23,700 14,800 $223,000 $85,000 $100,000 $75,000 $50,000 Discount Benefits $0 $79,050 $86,000 $59,250 $37,000 $261,300 Cash Flow Net Cash Flow