A firm imposes a payback cutoff of 3 years for its international investment projects.

Year 0: Cash Flow A: ($63,000), Cash Flow B: ($73,000)

Year 1: Cash Flow A: $24,500, Cash Flow B: $16,500

Year 2: Cash Flow A: $31,000, Cash Flow B: $19,500

Year 3, Cash Flow A: $22,500, Cash Flow B: 29,000

Year 4, Cash Flow A: $9,500, Cash Flow B: $233,000

What is the payback period for Project A and Project B? Which project should the company accept?

If the company evaluates all of its projects by applying the NPV decision rule, a project under consideration has the following cash flows: Year 0: ($27,500), Year 1: $11,500, Year 2: $14,500, Year 3: $10,500.

What is the NPV for the project if the required return is 11%? Should the project be accepted at 11%? What is the NPV of the project if the required rate of return is 25%? Should the firm accept the project at 25%?