Question: Consider the following projects: Cash Flows ($) Project C0 C1 C2 C3 C4 C5 A 3,000 3,000 0 0 0 0 B 6,000 3,000 3,000
Consider the following projects: Cash Flows ($) Project C0 C1 C2 C3 C4 C5 A 3,000 3,000 0 0 0 0 B 6,000 3,000 3,000 6,000 3,000 3,000 C 7,500 3,000 2,500 0 3,000 3,000 a. If the opportunity cost of capital is 10%, which project(s) have a positive NPV? Positive NPV project(s) Project A Project B Project C Projects A and B Projects A and C Projects B and C Projects A, B, and C No project b. Calculate the payback period for each project: (Round your answers to 2 decimal places. If a project never pays back, enter "0".) Project A 1 year(s) Project B 2 year(s) Project C year(s) c. Which project(s) would a firm using the payback rule accept if the cutoff period were three years? Project(s) accepted d. Calculate the discounted payback for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places. If a project never pays back, enter "0".) Project A year(s) Project B year(s) Project C year(s) e. Which project(s) would a firm using the discounted payback rule accept if the cutoff period were three years? Project(s) accepted
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