What is project discounted payback

Assignment Help Financial Management

Reference no: EM131334536

Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%.

Years 0 1 2 3 4

Project A -900 650 405 270 320

Project B -900 250 340 420 770

What is Project A's payback? Round your answer to four decimal places. Do not round your intermediate calculations. years

What is Project A's discounted payback? Round your answer to four decimal places. Do not round your intermediate calculations. years

What is Project B's payback? Round your answer to four decimal places. Do not round your intermediate calculations. years

What is Project B's discounted payback? Round your answer to four decimal places. Do not round your intermediate calculations. years

Reference no: EM131334536

Questions Cloud

Compare the calculated present values : Compare the calculated present values, and discuss them in light of the fact that the undiscounted total cash flows amount to $150,000 in each case.

Manufacturing facility that produces widgets : 1. Suppose you are hired to manage a small manufacturing facility that produces Widgets.

Provide quantitative estimates of likely pre and postmerger : Based only on these data, provide quantitative estimates of the likely pre- and postmerger prices in the wholesale market for premium Scotch liquor.

Complete a detailed master budget for muse : The Case: Project MUSE Empire-building Group Ltd - initial 12-month financial forecast for start-up business plan. Complete a detailed master budget for MUSE for the first twelve months. Your master budget must contain all necessary schedules, and b..

What is project discounted payback : Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. What is Project A's discounted payback? What is P..

Market for corn is perfectly competitive : Suppose that the market for corn is perfectly competitive. If corn farmers are currently generating losses, then we would expect that in the long run the market?

Determining the specific currency crisis : A number of currency crises have affected certain countries, which have also resulted in contagion in the sense that the crises affected neighboring countries. In a critical essay, select a country (or countries) affected by a specific currency cri..

Nettie consume if becky consumes hamburgers : After trade, how many hamburgers will Nettie consume if Becky consumes 4 hamburgers? How many cupcakes will Becky consume if Nettie consumes 4 cupcakes?

Bank demand immediate repayment of all existing loans : On the basis of your analysis, shoul Karen recommen that the bank extend the existing short- and long- term loans and grant the additional $6,375,000 loan, or that the bank demand immediate repayment of all existing loans? If she does recommend conti..

User Account

All Pages