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cash flows project C0 C1 C2 C3 C4 C5 A -1,000 1,000 0 0 0 0 B -2,000 1,000 1,000 1,000 0 0 C -3,000
| cash flows | ||||||
| project | C0 | C1 | C2 | C3 | C4 | C5 |
| A | -1,000 | 1,000 | 0 | 0 | 0 | 0 |
| B | -2,000 | 1,000 | 1,000 | 1,000 | 0 | 0 |
| C | -3,000 | 1,000 | 1,000 | 0 | 1000 | 1,000 |
a) If the opportunity cost of capital is 11 percent, which projects have a positive NPV? b) Calculate the payback period for each project. c) Which project(s) would a firm using the payback rule accept if the cutoff period is three years?
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