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value 10.00 points Consider the following projects Cash Flows (S) Project Co -2,800 -5,600 -7,000 2,800 2,800 2,800 2,800 2,500 2.800 2,800 2,800 2,800 8 5.800 a. If the opportunity cost of capital is 12%, which project(s) have a positive NPV? Positive NPV projects) O Project A O Project B O Project C O Projects A and B O Projects A and C Projects B and C O Projects A, B, and C O No project b. Calculate the payback period for each project: (Round your answers to 2 decimal places. If a project never pays back, enter o. Project A Project B Project C year(s) year(s) year s)c. Which project(s) would a firm using the payback rule accept if the cutoff period were three years? Project(s) accepted d. Calculate the discounted payback for each project (Do not round intermediate calculations. Round your answers to 2 decimal places. If a project never pays back, enter (Click to select) Project A Project B Project C year(s year(s) year(s) e. Which project(s) would a firm using the discounted payback rule accept if the cutoff period were three years? Project(s) accepted (Click to select) References eBook & Resources Worksheet Difficulty: Intermediate

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2800-5600-7000 2800 28002800 CO C1 C2 C3 C4 CS OPPOURTUNITY COST 12% C) 0 C) C) 2800 2500 0 2800 2800 2800 2800 NPV 300.00 6628.71861.23 FORMULA NPV(12%,C1:35)+CO

A) Project B and C have Positive cash flow

B)

2800 5600 7000 C1 C2 C3 0 0 0 0 5800 0 Payback period for Project A Total amount of outflow i.e 2800 have been received in 1 Year 1st year Payback period for Project B 2800 in year 1 and 2800 in year 2-total outflow of-5600 2 YEAR Payback period for Project C Paid 5300 in 3 year and remaning 1700 paid in (1700/2800) 0.61 3.61 Year

C) A&B

D)

Discounted value of A B Discounted C value of B Discounted value of C 0 CO 1C1 2 C2 3 C3 4 C4 5 C5 2800 2800 0 0 0 0 5600 2800 2800 5800 2800 1,779.45 -7000 OPPOURTUNITY COST 28001 乏2,500.00 2500| 1,992.98 0.00 2800 1,779.45 28001 乏1,588.80 2,500.00 2,500.00 乏2,232.14 4,128.33 0 1,588.80 Discounted Project A Payback will not be period for able to pay Project A back Discounted Payback period for Project B Discounted Payback 4.46 year in 4 year project period for Project C 2.21 | 2500+2232.14= 4732.14 remaining 867.86 will be paid in 867.86/4128.33 recovered 6272.43 and remaining in (727.57/1500.80) 0.21

E) Project B

FORMULA TO CALCULATE PV

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