Both projects have 4-year lives and they have risk


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 10%. 0 1 2 3 4 Project A -900 650 450 270 320 Project B -900 250 385 420 770 What is Project A's payback?

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Financial Management: Both projects have 4-year lives and they have risk
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