Question
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
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. Depreciation, 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 7%.
| 0 | 1 | 2 | 3 | 4 | ||||||
| Project A | -950 | 600 | 450 | 250 | 300 | |||||
| Project B | -950 | 200 | 385 | 400 | 750 | |||||
What is Project A's payback? Round your answer to four decimal places. Do not round your intermediate calculations. __years
What is Project A's discounted payback? Round your answer to four decimal places. Do not round your intermediate calculations. __years
What is Project B's payback? Round your answer to four decimal places. Do not round your intermediate calculations. ___years
What is Project B's discounted payback? Round your answer to four decimal places. Do not round your intermediate calculations. ___years
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The Euro A Challenge And Opportunity For Financial Markets Routledge International Studies In Money And Banking
Authors: Michael Artis , Elizabeth Hennessy, Axel Weber
1st Edition
0415217105, 978-0415217101
