Use excel to solve for Payback Period for Project 1, 2, and 3. Please show the steps taken to get to the solution and formula if any. Thank you.

Capital Budgeting Exercises: Three independent projects are under consideration for capital budgeting purposes. Their respective initial investment, cost of capital, and cash flows are provided below. Use the following capital budgeting techniques to evaluate all three projects and indicate which project should be undertaken, assuming there is no budget constraint: Payback period method Discounted payback period method Net present value method IRR method Project 1 Project 2 Project 3 $125,000 $200,000 $160,000 Initial Investment Cost of Capital Target payback period 8% 4 years 10% 4 years 12% 4 years Year 1 Year 2 Year 3 Year 4 Year 5 $30,000 30,000 30,000 30,000 40,000 Cash flows $45,000 45,000 60,000 60,000 60,000 $35,000 40,000 45,000 50,000 60,000 Capital Budgeting Spreadsheet Example ASSIGNMENT # NAME: LAB TIME: Answer Sheet for Capital Budgeting Exercises From Previous Page Project 1 Project 2 Project 3 Which project(s) should be accepted? Payback period Discounted payback period NPV IRR