1. Calculate the payback period for Projects A and B. (3 points)

	Project A	Project B
Cost of Capital	10%	12%
Initial Investment	50000	75000
CF1	25000	35000
CF2	30000	50000
CF3	40000	50000
Maximum allowable payback	2	2.5

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)

Should project A be accepted? Why or why not?

Should project B be accepted? Why or why not?

4. What can you surmise about the IRR for Project A? Project B? (5 points)