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please help w quanitive problem payback considers costs. However, the discounted payback still disregards cash flows beyond the payback year. In addition, there is no
please help w quanitive problem
payback considers costs. However, the discounted payback still disregards cash flows beyond the payback year. In addition, there is no specific payback rule to justify project acceptance. Both methods provide information about liquidity and risk. Quantitative Problem: 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 11% 0 1 2 3 -1,100 -1,100 600 200 350 285 270 420 320 770 Project A Project B What is Project A's payback? Do not round intermediate calculations. Round your answer to four decimal places. years What is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. years What is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal places. years What is Project 8's discounted payback? Do not round Intermediate calculations, Round your answer to four decimal places. years Save & Continue Step by Step Solution
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