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A firm is considering the following projects. Its opportunity cost of capital is 10%. Project Time: 4 -5,000 -1,000 -5,000 B Cash Flows, $ 2
A firm is considering the following projects. Its opportunity cost of capital is 10%. Project Time: 4 -5,000 -1,000 -5,000 B Cash Flows, $ 2 3 +1,000 +3,000 +1,000 +2,000 +1,000 +3,000 +1,000 +1,000 +3,000 +5,000 a-1. What is the payback period on each project? (Do not round intermediate calculations. Round your answers to the nearest whole number.) Payback Period years Project A Project B Project C years years a-2. What is the discounted payback period on each project? (Do not round intermediate calculations. Round your answers to 2 decimal places. If any of the projects does not pay back on a discounted basis, enter zero ("O").) Discounted Payback Period years Project A Project B Project C years years b. Given that you wish to use the payback rule with a cutoff period of 2 years, which projects would you accept? c. If you use a cutoff period of 3 years with the discounted payback rule, which projects would you accept? d. Which projects have positive NPVs
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