a. Project B costs $10,000 and will generate after-tax cash inflows of $900 in year 1, $2,400 in year 2, $4,300 in year 3, $3,400 in year 4, and $4,300 in year 5. What is the payback period (in years) for this investment assuming that the cash inflows occur evenly throughout the year? (Round your answer to 2 decimal places.) b. Project C costs $10,000 and will generate net cash inflows of $4,750 before taxes for 5 years. The firm uses straight-line depreciation with no salvage value and is subject to a 20% tax rate. What is the payback period under the assumption that all cash inflows occur evenly throughout the year?
Answer each independent question, (a) through (e), below.
a. Project B costs $10,000 and will generate after-tax
b. Project C costs $10,000 and will generate net cash inflows of $4,750 before taxes for 5 years. The firm uses straight-line
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