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Given the cash flow of two projects, A and B: Cash Flow Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A -$14,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Project B -$95,000 $19,000 $9,500 $38,000 $28,000 $20,000 $10,000 The firm's weighted average cost of capital is 10%. The firm's required payback and discounted payback period is 3 years.

Given the cash flow of two projects, A and B: Cash Flow Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A -$14,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Project B -$95,000 $19,000 $9,500 $38,000 $28,000 $20,000 $10,000 The firm's weighted average cost of capital is 10%. The firm's required payback and discounted payback period is 3 years.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What is Project A's Discounted Payback Period?

Use the following information to answer the next 3 questions: Given the cash flow of two projects, A and B: Cash Flow Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A -$14,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Project B -$95,000 $19,000 $9,500 $38,000 $28,000 $20,000 $10,000 The firm's weighted average cost of capital is 10%. The firm's required payback and discounted payback period is 3 years.
Transcribed Image Text:Use the following information to answer the next 3 questions: Given the cash flow of two projects, A and B: Cash Flow Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A -$14,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Project B -$95,000 $19,000 $9,500 $38,000 $28,000 $20,000 $10,000 The firm's weighted average cost of capital is 10%. The firm's required payback and discounted payback period is 3 years.
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