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You have just started work at a large frozen food manufacturer and have been assigned to lead a team that makes recommendations to the CFO
You have just started work at a large frozen food manufacturer and have been assigned to lead a team that makes recommendations to the CFO on capital expenditures for the coming year. You are evaluating two projects; Project A and Project B. You estimate the cost of capital is 10% and that the investments will produce the following after tax cash flows.
Year | Project A | Project B |
0 | -47 | -30 |
1 | 28 | 20 |
2 | 28 | 9 |
3 | 28 | 9 |
What is the Payback Period (PBP) for Project A?
(Please enter your answer with 2 decimal places)
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