Part 1-Find the payback in years (to the nearest tenths place) for the following cash flow with a WACC of 4%:

Time Period Cash Flow Cumulative Out of Pocket

0 -100 -100

1 40 -60

2 50 -10

3 20 +30

4 70 +100

Part 2-Find the discounted payback in years (to the nearest tenths place) for the following cash flow with a WACC of 12%. Hint: interpolation must be used and I have started the table for you.

Time Period Cash Flow PV of Cash Flow Cumulative

0 -100 -100 -100

1 40 35.71 -64.29

2 50 ? ?

3 20 ? ?

4 70 ? ?