Question: Consider the following projects: Project A B -1,000 -2,000 -3,000 Cash Flows ($) C1 C2 1,000 0 1,000 1,000 1,000 1,000 Cz 0 4,000 0
Consider the following projects: Project A B -1,000 -2,000 -3,000 Cash Flows ($) C1 C2 1,000 0 1,000 1,000 1,000 1,000 Cz 0 4,000 0 0 1,000 1,000 0 1,000 1,000 a. If the opportunity cost of capital is 10%, which project(s) 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 is 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 is three years
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