1. Given the cash flows of the four projects, A, B, C, and D, and using the payback period decision model, which projects do you accept and which projects do you reject with a three-year cutoff period for recapturing the initial cash outflow?

Assume that the cash flows are equally distributed over the year. 2. Assume the above table for future cash flow of projects. Calculate the discounted payback period for projects A and B if the discount rate is 10%.

Cash Flow Cost Cash flow year 1 4,000 2,000 $10,000 40,000 Cash flow year 2 4,000 8,000 $15,000 30,000 Cash flow year 34,000 $14,000 $20,00020,000 Cash flow year 4 4,000 $20,000 $20,000 10,000 Cash flow year 5 $ 4,000 $26,000 $15,000 $ 0 Cash flow year 6 $10,000$25,000 $45,000 $100,000 $4,000 $32,000 $10,000 $ 0