Question: SCH Sum Here are the expected cash flows for three projects Project Year - 5.100 - 1.100 - 5.100 1,025 - 1.025 - 1.025 -
SCH Sum Here are the expected cash flows for three projects Project Year - 5.100 - 1.100 - 5.100 1,025 - 1.025 - 1.025 - 1.100 - 1.025 3 3.050 +2.050 1,050 D - 3,050 a. 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 11%, calculate the NPV for projects A, B, and C. (Negative amounts should be indicated by minus sign. Do not round Intermediate calculations. Round your answers to 2 decimal places.) d-2. Which projects have positive NPVS? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? Project Years Projects Years Project Payback period b. if you use the payback rulo with a cutoff period of 2 years, which projects will you nocupt? c. if you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital in 11%, calculate the NPV for projects A B, and d-2 Which projects have positive NPVs? "Payback gives too much weight to cash flows that occur after the cutoff date. True or false
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
