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 8%. 01234 Project A-1,250650380250300Project B-1,250250315400750 What is Project A's payback? Do not round intermediate calculations. Round your answer to four decimal placesWhat is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal placesWhat is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal placesWhat is Project B's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places

We will use the different tools of capital budgeting here to determine the financial feasibility of…

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Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

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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 8%.

	0	1	2	3	4

Project A	-1,250	650	380	250	300
Project B	-1,250	250	315	400	750

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

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

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

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

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