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Compute projects payback period

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Reference no: EM132711473

A company has two projects to choose from with the following annual after-tax cash flows: Project X

Investment (today)      $800,000

Investment (Year 1)    $500,000

Years 2-5                     $750,000

Project Y

Investment (today)   $1,800,000

Years 1-5                     $950,000

The firm's cost of capital is 12 percent.

Compute both projects' payback period and discounted payback period.

Reference no: EM132711473

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