Problem 5-2 Payback Consider the following projects: Cash Flows ($) Project C0 C1 C2 C3 C4 C5 A 1,400 1,400 0 0 0 0 B 2,800 1,400 1,400 4,400 1,400 1,400 C 3,500 1,400 1,000 0 1,400 1,400 If the opportunity cost of capital is 10%, which project(s) have a positive NPV? Calculate the payback period for each project. Which project(s) would a firm using the payback rule accept if the cutoff period is three years? Calculate the discounted payback period for each project. Which project(s) would a firm using the discounted payback rule accept if the cutoff period is three years?

Consider the following projects: C3 C4 Project A B C -1,400 -2,800 -3,500 Cash Flows ($) C1 C2 1,400 0 1,400 1,400 1,400 1,000 C5 @ 1,400 1,400 4,400 0 1,400 1,400 nu 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? Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Required E Calculate the payback period for each project. (Round your answers to 2 decimal places.) Project A Project B Project C year(s) year(s) year(s)