Professional Assignment $1-$CLO $1,$ CLO $2,$ CLO $5,$ CLO $6$

Consider the cash flows for the following three projects: $\backslash (\backslash$mathrm$\{$A$\},\backslash$mathrm$\{$B$\}\backslash ),$ and C $.$

a$.$ If the opportunity cost of capital is $\backslash (11\backslash \%\backslash ),$ and you have unlimited access to the capital, which one$($s$)$ would you accept? Why did you answer the way you did? Would your response change if the cost of capital is $\backslash (16\backslash \%\backslash )?$ Why or why not?

b$.$ Suppose that you have limited access to the capital and you need to choose only one project. Which one would you choose and why? The discount rate is still $\backslash (11\backslash \%\backslash ).$

c$.$ What is the payback period of each project? Please analyze if$,$ in general, a decision based on payback is consistent with a decision based on NPV$.$

d$.$ What are the internal rates of return $($IRR$)$ on the three projects? Does the IRR rule in this case give the same decision as NPV$?$ How do you know?

e$.$ If the opportunity cost of capital is $\backslash (11\backslash \%\backslash ),$ what is the profitability index for each project? Please analyze if$,$ in general, decisions based on profitability index are consistent with decisions based on NPV$.$

f$.$ What is the most generally accepted measure to choose between the projects? Please justify your answer.