a. Project A costs $5,500 and will generate annual after-tax net cash inflows of $1,950 for five years. What is the payback period for this investment under the assumption that the cash inflows occur evenly throughout the year?

(Round your answer to 2 decimal places.)

 

 b. Project B costs $5,500 and will generate after-tax cash inflows of $550 in year one, $1,350 in year two, $2,600 in year three, $3,050 in year four, and $2,600 in year five. What is the payback period (in years) for this investment 

assuming that the cash inflows occur evenly throughout the year?(Round your answer to 2 decimal places.)

 

 c. Project C costs $5,500 and will generate net cash inflows of $2,700 before taxes for five years. The firm uses straight-line depreciation with no salvage value and is subject to a 30% tax rate. What is the payback period

?(Round your answer to 2 decimal places.)

 

d. Project D costs $5,500 and will generate sales of $5,100 each year for five years. The cash expenditures will be $2,050 per year. The firm uses straight-line depreciation with an estimated salvage value of $600 and has a tax rate of 30%.(Round your answer to 2 decimal places.)

(1)What is the book rate of return based on the original investment?

(2)What is the book rate of return based on the average book value?

Use the built-in NPV function in Excel to calculate the amounts for projects a through d.e1.

What is the NPV of project A? Assume that the firm requires a minimum after-tax return of 9% on investment.(Round your answer to the nearest whole dollar amount.)

e2.What is the NPV of project B? Assume that the firm requires a minimum after-tax return of 9% on investment.(Round your answer to the nearest whole dollar amount.)

e3.What is the NPV of project C? Assume that the firm requires a minimum after-tax return of 9% on investment.(Round your answer to the nearest whole dollar amount.)

e4.What is the NPV of project D? Assume that the firm requires a minimum after-tax return of 9% on investment.(Round your answer to the nearest whole dollar amount.)