Question: Consider the following projects: a. If the opportunity cost of capital is 10 percent, which projects have a positive NPV? b. Calculate the payback period

Consider the following projects:

a. If the opportunity cost of capital is 10 percent, which projects have a positive NPV?

b. Calculate the payback period for each project.

c. Which project(s) would a firm using the payback rule accept if the cutoff period were threeyears?

Cash Flows (5) C, Project c, C. -1,000 -3,000 +1,000 +1,000 +1,000

Cash Flows (5) C, Project c, C. -1,000 -3,000 +1,000 +1,000 +1,000 +1,000 +4,000 +1,000 +1,000 +1,000 +1,000 +1,000

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