Question: answer questions a-c thoroughly with no excel calculations please :) A firm is considering the following projects. Its opportunity cost of capital is 10%, Cash
A firm is considering the following projects. Its opportunity cost of capital is 10%, Cash Flows, $ Project Time: 0 -5,800 -1,800 -5,800 +1,200 O +1,200 +1,200 +1,800 +1,200 +3,400 +2,400 +3,400 +3,400 +5,800 a. What is the payback period on each project? Project A 3 years Project B 2 years Project C 3 years What is the discounted payback period on each project? (Round your answers to 2 decimal places. If any of the projects does not pay back on a discounted basis, enter zero ("O").) Project A D O years Project B years Project C C years b. Given that you wish to use the payback rule with a cutoff period of 2 years, which projects would you accept? (Project B c. If you use a cutoff period of 3 years with the discounted payback rule, which projects would you accept? Project B 9
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