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1. (Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the cash flow information calculate the payback

1. (Payback period calculations) You are considering three independent projects: project A, project B, and project C. Given the cash flow information calculate the payback period for each. If you require a 3-year payback before an investment can be accepted, which project(s) would be accepted?

PROJECT A

PROJECT B

PROJECT C

Initial Outlay

$-900

$-11, 000

-$-5, 000

Inflow year 1

$600

$6,000

$2,000

Inflow year 2

$300

$2,000

$2,000

Inflow year 3

$200

$2,000

$4,000

Inflow year 4

$100

$2,000

$4,000

Inflow year 5

$600

$2,000

$4,000

What is the payback period of project A? years (Round to two decimal places.) ANSWER:

What is the payback period of project B? years (Round to two decimal places.) ANSWER:

What is the payback period of project C? years (Round to two decimal places.) ANSWER:

2.

YEAR

PROJECT

CASH FLOW

0

$-100,000

1

$20,000

2

$60,000

3

$70,000

4

$50,000

5

$40,000

(Discounted payback period) Sheinhardt Wig Company is considering a project that has the following cash flows: If the project's appropriate discount rate is 10 percent, what is the project's discounted payback period? The project's discounted payback period is years. (Round to two decimal places.) ANSWER:

ANSWER EACH (BOTH) QUESTION CORRECTLY AND FULLY!!!

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