Bellinger Industries is considering two projects for inclusionin its capital budget, and you have been asked to do the analysis.Both projects' after-tax cash flows are shown on the time linebelow. Depreciation, salvage values, net operating working capitalrequirements, and tax effects are all included in these cash flows.Both projects have 4-year lives, and they have risk characteristicssimilar to the firm's average project. Bellinger's WACC is 10%.
| 0 | 1 | 2 | 3 | 4 |
| | | | | | | | | | |
| Project A | -950 | 700 | 390 | 210 | 260 |
| Project B | -950 | 300 | 325 | 360 | 710 |
What is Project A's payback?
What is Project A's discounted payback?
What is Project B's payback?
What is Project B's discounted payback?
