1.

Project	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
	Cash Flow	Cash Flow	Cash Flow	Cash Flow	Cash Flow	Cash Flow
A	-11000	6000	6000	6000	6000	6000
B	-11000	7000	7000	7000	7000	7000
C	-12000	12000	2000	2000	2000	2000

A) The cash flows for three projects are shown above. The cost of capital is 11%. The net present value (NPV) of project A is _______

B) If an investor decided to take projects with a payback period of 2 years or less, which of these would he take?

1) investment A

2) investment B

3) investment C

4) None of these investments