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1. Calculate the payback period for Projects A and B. (3 points) Project A Project B Cost of Capital 10% 8% Initial Investment 50000 35000

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1. Calculate the payback period for Projects A and B. (3 points) Project A Project B Cost of Capital 10% 8% Initial Investment 50000 35000 CF1 33000 30000 CF2 28000 20000 CF3 41000 50000 Maximum allowable 2.5 payback 2.75 Should project A be accepted? Why or why not? Should project B be accepted? Why or why not? 2. Calculate the discounted payback period for Projects A and B. (6 points) Should project A be accepted? Why or why not? Should project B be accepted? Why or why not? 3. Calculate/show the NPV for Projects A and B. (6 points)

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