There are four projects A, B, C and D, the cash flows of each project are shown in the following table.

Year 0 Year 1 Year 2 IRR

A -40 20 30 15.14%

B -30 14 ? 17.55%

C ? 46 10 10.16%

D -20 12 14 ?

1.a) There are missing information of project B, C and D with question marks, please determine the missing information.

1.b) If you want to have the quickest payback period, which project will you choose?

1.c) Now we only consider project A and B, please use the incremental IRR to determine the range of discount rates for which each project is optimal to undertake.

(You should also include the range in which it does not make sense to take either project.)

1.d) Suppose you have 90$ cash at year 0 and you can take several projects. If the cost of capital is 10%, which projects will you take?

1.e) Suppose you have 70$ cash at year 0 and you can take several projects. If the cost of capital is 10%, which projects will you take?