Consider three projects with cash flows given below:

1. If the appropriate discount rate is 10%, what is the NPV of each project?
2. Compute the payback period of each project. Which project should be accepted if the threshold payback period is 3 years?
3. Compute the discounted payback period of each project. Which project should be accepted if the threshold payback period is 3 years?

ProjectYear 0Year 1Year 2Year 3Year 4Year 5A-$1,000$1,000$0$0$0$0B-$2,000$1,000$1,000$4,000$1,000$1,000C-$3,000$1,000$1,000$0$1,000$1,000