Solution-Projects payback period and discounted payback

Projects payback period and discounted payback period

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Reference no: EM132788100

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

Project A

Investment (today) $700,000

Investment (Year 1) $300,000

Years 2-8 $700,000

Project B

Investment (today) $1,600,000

Years 1-8 $725,000

The firm's cost of capital is 12 percent.

Compute both projects' payback period and discounted payback period

Reference no: EM132788100

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Projects payback period and discounted payback period

Reference no: EM132788100

Reference no: EM132788100

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