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 7%.
| 0 | 1 | 2 | 3 | 4 |
| | | | | | | | | | |
| Project A | -1,000 | 600 | 355 | 210 | 260 |
| Project B | -1,000 | 200 | 290 | 360 | 710 |
What is Project A's payback? Round your answer to four decimalplaces. Do not round your intermediate calculations.
What is Project A's discounted payback? Round your answer tofour decimal places. Do not round your intermediatecalculations.
What is Project B's payback? Round your answer to four decimalplaces. Do not round your intermediate calculations.
What is Project B's discounted payback? Round your answer tofour decimal places. Do not round your intermediatecalculations.
