Consider the following projects: Cash Flow () Project CO C1 C2 C3 A -5,000 +4,000 +1,000...

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Consider the following projects: Cash Flow () Project CO C1 C2 C3 A -5,000 +4,000 +1,000 0 0 C4 70 0 50 C5 B -3,000 +1,000 +1,000 +2,000 +1,500 +1,500 C -2,000 +1,000 +500 0 +1,200 +1,200 a. b. If the opportunity cost of capital is 8%, which projects have a positive NPV? Calculate the payback period for each project. Which project(s) would a firm using the payback rule accept, if the cut-off period were three years? C. Calculate the internal rate of return (IRR) of project A. d. If we only have 8,000 to invest, which project(s) should we select and why? show the formulas and the computation used! Consider the following projects: Cash Flow () Project CO C1 C2 C3 A -5,000 +4,000 +1,000 0 0 C4 70 0 50 C5 B -3,000 +1,000 +1,000 +2,000 +1,500 +1,500 C -2,000 +1,000 +500 0 +1,200 +1,200 a. b. If the opportunity cost of capital is 8%, which projects have a positive NPV? Calculate the payback period for each project. Which project(s) would a firm using the payback rule accept, if the cut-off period were three years? C. Calculate the internal rate of return (IRR) of project A. d. If we only have 8,000 to invest, which project(s) should we select and why? show the formulas and the computation used!

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Answer a To determine which projects have a positive NPV we need to calculate the NPV for each proje... View the full answer