Problem:
Timeline Manufacturing Co. is evaluating two projects. the company uses payback criteria of three years or less. Project A has a cost of $912,855, and project B's cost will be $1,175.000. Cash flows from both projects are given in the following table. What are their discounted payback periods, and which will be accepted with a discount rate of 8 percent?
Year Project A Project B
1 $86,212 $586,212
2 $313,562 $413,277
3 $427,594 $231,199
4 $285,552