Question: Problem 8-29 NPV Payback and (LO 1, L04) Here are the expected cash flows for three projects: Project A Yeart 4 6,200 2,200 5,200 Cash
Problem 8-29 NPV Payback and (LO 1, L04) Here are the expected cash flows for three projects: Project A Yeart 4 6,200 2,200 5,200 Cash Flows dollar's 2 + 1.300 1,300 3.600 + 2,200 + 2,600 + 1.300 1,300 + 3.600 OK . 3,600 + 5.600 .. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 10%, calculate the NPV for projects A B, and C. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) d-2. Which projects have positive NPV? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? Project Years Project Years Project Years Payback period b. you use the payback rude with a cutoff period of 2 years, which projects will you acompt? if you use a cutoff period of 3 years, which projects will you accept? 4.1. the opportunity cost of capital is 10%, calculate the NPV for projects A B, and 02. Which projects have positive NPV: *Payback gives too much weight to cash flows that occur after the cutoff date. True or false
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