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FinanceQ&A LibraryProject L has cash flows of -$900 at time zero; $490 at time 1; $410 at time 2; $490 at time 3. Use WACC of 7%. Project K has original cost of -$2,000 at time zero; $300 at time 1; $ 850 at time 2: $700 at time 3; $1,200 at time 4. Use WACC of 7%. Find payback period for both projects Find NPV for both projects If the company favors projects with shorter paybacks, how much NPV will be forgone?Start your trial now! First week only $4.99!*arrow_forward*

Question

Project L has cash flows of -$900 at time zero; $490 at time 1; $410 at time 2; $490 at time 3. |

Use WACC of 7%.

Project K has original cost of -$2,000 at time zero; $300 at time 1; $ 850 at time 2: $700 at time 3; $1,200 at time 4. |

Use WACC of 7%.

- Find payback period for both projects
- Find NPV for both projects
- If the company favors projects with shorter paybacks, how much NPV will be forgone?

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