Senior management asks you to recommend a decision on which project(s) to accept based on the cash flow forecasts provided.The firm uses a 3-year cutoff when using the payback method. The hurdle rate used to evaluate capital budgeting projects is 15%.

Assume the projects are independent and answer the following:

• Calculate the payback period for each project.
• Which project(s) would you accept based on the payback criterion?
• Calculate the internal rate of return (IRR) for each project.
• Which projects would you accept based on the IRR criterion?
• Calculate the net present value (NPV) for each project.
• Which projects would you accept based on the NPV criterion

• 	Project A	Project B	Project C
  Year 0	-30,000	-20,000	-50,000
  Year 1	0	4,000	20,000
  Year 2	7,000	5,000	20,000
  Year 3	20,000	6,000	20,000
  Year 4	20,000	7,000	5,000
  Year 5	10,000	8,000	5,000
  Year 6	5,000	9,000	5,000