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Calculate the payback period for project a and b

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A firm has a WACC of 12.81% and is deciding between two mutually exclusive projects. Project A has an initial investment of $62.77. The additional cash flows for project A are: year 1 = $19.55, year 2 = $38.81, year 3 = $69.23. Project B has an initial investment of $72.74. The cash flows for project B are: year 1 = $53.26, year 2 = $48.15, year 3 = $23.66.

Problem 1: Calculate the Following:

a) Payback Period for Project A:
b) Payback Period for Project B:
c) NPV for Project A:
d) NPV for Project B:

Reference no: EM132729686

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