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 10%. 3 0 years 1 Project A -1.100 Project B -1.100 What is Project A's payback? Do not round intermediate calculations. Round your answer to four decimal places. 2 650 250 years 395 330 230 380 years What is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. 280 730 What is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal places. years What is Project B's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places.
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 10%. 3 0 years 1 Project A -1.100 Project B -1.100 What is Project A's payback? Do not round intermediate calculations. Round your answer to four decimal places. 2 650 250 years 395 330 230 380 years What is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. 280 730 What is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal places. years What is Project B's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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