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What is the projects discounted payback

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Reference no: EM132490031

A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

                             Project S               Project L

0                            -$1,000                -$1,000

1                             $896.00                $0

2                             $250                   $240

3                                $10                    $420

4                                 $5                       $814.70

Question 1: The company's WACC is 8.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.)

Question 2: Project L requires an initial outlay at t = 0 of $65,000, its expected cash inflows are $15,000 per year for 9 years, and its WACC is 10%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132490031

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