Question: Consider the following projects: Project Cash Flows ($) C00 C11 C22 C33 C44 C55 A 1,700 1,700 0 0 0 0 B 3,400 1,700 1,700

Consider the following projects:

Project Cash Flows ($)
C00 C11 C22 C33 C44 C55
A 1,700 1,700 0 0 0 0
B 3,400 1,700 1,700 4,700 1,700 1,700
C 4,250 1,700 1,200 0 1,700 1,700
  1. If the opportunity cost of capital is 9%, which project(s) have a positive NPV?
  2. Calculate the payback period for each project.
  3. Which project(s) would a firm using the payback rule accept if the cutoff period is three years?

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