Problem 1: Two new Internet site projects are proposed to a young start-up company. Project A will cost $250,000 to implement and is expected to have annual net cash flows of $75,000. Project B will cost $150,000 to implement and should generate annual net cash flows of $52,000. The company is very concerned about their cash flow. Using the payback period, which project is better, from a cash flow standpoint? (10 points) Problem 2: Sean, a new graduate at a telecommunications firm, faces the following problem his first day at the firm: What is the average rate of return for a project that costs $200,000 to implement and has an average annual profit of $30,000? (10 points) Problem 3: Use a weighted score model to choose between three methods (A, B, C) of financing the acquisition of a major competitor. The relative weights for each criterion are shown in the following table as are the scores for each location on each criterion. A score of 1 represents unfavorable, 2 satisfactory, and 3 favorable. (20 points) Determine which is the best method. (A, B, or C?) Method Category Weight ABC Consulting costs 20 Acquisition time 20 231 Disruption 10 2113 Cultural differences 10 3132 Skill redundancies 10 2 111 Implementation risks 25 1 12 13 Infrastructure 10 22