Consider the following projects:

a. If the opportunity cost of capital is 10%, 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 three years?
d. Calculate the discounted payback period for each project.
e. Which project(s) would a firm using the discounted payback rule accept if the cutoff period were threeyears?

Cash Flows ($) Project C C1 C5 1,000 +1,000 B 2,000 000 ,000 +4,000 1000 1,000 +1,000 1,000 3,000 1,000 1,000