Consider the following projects:
Cash Flows ($) | ||||||
Project | C0 | C1 | C2 | C3 | C4 | C5 |
A | −1,000 | + 1,000 | 0 | 0 | 0 | 0 |
B | −2,000 | + 1,000 | + 1,000 | +4,000 | +1,000 | + 1,000 |
C | −3,000 | + 1,000 | + 1,000 | 0 | +1,000 | + 1,000 |
a. If the opportunity cost of capital is 10%, which projects have a positive NPV?
b. Calculate the payback period for each project.
c. Which project(s) would a firm using the payback rule accept if the cutoff period were three years?
d. Calculate the discounted payback period for each project.
e. Which project(s) would a firm using the discounted payback rule accept if the cutoff period were three years?
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.