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Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows:

	Expected Net Cash Flows
Time	Project A	Project B
0	($375)	($575)
1	($300)	$190
2	($200)	$190
3	($100)	$190
4	$600	$190
5	$600	$190
6	$926	$190
7	($200)	$0

What is the regular payback period for these two projects?

Project A
	Time period	0	1	2	3	4	5	6	7
	Cash flow	(375)	(300)	(200)	(100)	600	$600	$926	($200)
	Cumulative cash flow
Intermediate calculation for payback
Payback using intermediate calculations
Project B
	Time period	0	1	2	3	4	5	6	7
	Cash flow	($375)	$190	$190	$190	$190	$190	$190	$0
	Cumulative cash flow
Intermediate calculation for payback
Payback using intermediate calculations
Payback using PERCENTRANK			Ok because cash flows follow normal pattern.
g. At a cost of capital of 12%, what is the discounted payback period for these two projects?
WACC =	12%
Project A
	Time period	0	1	2	3	4	5	6	7
	Cash flow	($375)	($300)	($200)	($100)	$600	$600	$926	($200)
	Disc. cash flow
	Disc. cum. cash flow
Intermediate calculation for payback
Payback using intermediate calculations
Project B
	Time period	0	1	2	3	4	5	6	7
	Cash flow	($575)	$190	$190	$190	$190	$190	$190	$0
	Disc. cash flow
	Disc. cum. cash flow
Intermediate calculation for payback
Payback using intermediate calculations
	Discounted Payback using PERCENTRANK		Ok because cash flows follow normal pattern.

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