Problem 5-2 Payback Consider the following projects:

	Co	C1	C2	C3	C4	C5
A	-1700	1700	0	0	0	0
B	-3400	1700	1700	4700	1700	1700
C	-4250	1700	1200	0	1700	1700

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?

4. Calculate the discounted payback period for each project.

5. Which project(s) would a firm using the discounted payback rule accept if the cutoff period is three years?

Problem 5-2 Payback Consider the following projects: C4 Project B -1,700 -3,400 -4,250 Cash Flows ($) Ci C2 1,700 0 1,700 1,700 1,700 1,200 C3 0 4,700 0 0 1,700 1,700 Cs 0 1,700 1,700 a. If the opportunity cost of capital is 9%, 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? Required A Required B Requ Calculate the payback period for e 1.00 year(s) Project A Project B Project 2.00 year(s) 4.79 year(s) Required A Required B Required C Required D Calculate the discounted payback period for each project. decimal places. If a project never pays back, enter "0".) Project A Project B Project C 1.00 year(s) 2.11 year(s) 4.47 year(s)