Question: Consider the following information: Project Cash Flows ($) C 0 C 1 C 2 C 3 C 4 A 6,800 2,000 2,000 2,800 0 B

Consider the following information:

Project	Cash Flows ($)
Project	C₀	C₁	C₂	C₃	C₄
A	6,800	2,000	2,000	2,800	0
B	2,100	0	1,000	3,800	4,800
C	6,000	3,100	2,000	2,300	1,800

a. What is the payback period on each of the above projects? b. Given that you wish to use the payback rule with a cutoff period of two years, which projects would you accept? c. If you use a cutoff period of three years, which projects would you accept? d. If the opportunity cost of capital is 10%, which projects have positive NPVs? e. If a firm uses a single cutoff period for all projects, it is likely to accept too many shortlived projects. True or false?

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