Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $870,772, and project B's cost is $1,260,423. Cash flows from both projects are given in the following table. Year Project A Project B $86,212 $586,212 313,562 1 2. 413.277 3 427,594 231,199 4 285,552 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback periods of project A Discounted payback periods of project B Which will be accepted with a discount rate of 8 percent? Timeline should choose Click if you would like neither project or this question: Open Show Work Project A Project B Both projects LINK TO TEXT

EBK CFIN
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ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter9: Capital Budgeting Techniques
Section: Chapter Questions
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Problem 10.18
Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $870,772, and project B's cost is
$1,260,423. Cash flows from both projects are given in the following table.
Year Project A Project B
$86,212 $586,212
313,562
427,594
285,552
1
2
413,277
231,199
3
4
What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for
the answer.)
Discounted payback periods of project A
Discounted payback periods of project B
Which will be accepted with a discount rate of 8 percent?
Timeline should choose
Click if you would like neither project
or this question: Open Show Work
Project A
Project B
Both projects
LINK TΟ ΤΕXT
Transcribed Image Text:Problem 10.18 Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $870,772, and project B's cost is $1,260,423. Cash flows from both projects are given in the following table. Year Project A Project B $86,212 $586,212 313,562 427,594 285,552 1 2 413,277 231,199 3 4 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback periods of project A Discounted payback periods of project B Which will be accepted with a discount rate of 8 percent? Timeline should choose Click if you would like neither project or this question: Open Show Work Project A Project B Both projects LINK TΟ ΤΕXT
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