Consider the following independent projects:

	Cash Flow ($)
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	1,000	1,000

a. If the opportunity cost of capital is 8%, calculate the net present value (NPV) of each project.

b. Based on the NPV calculated in a), which project (s) should a firm accept? Why?

c. Calculate the payback period for each project.

d. Which project(s) would a firm using only the payback rule accept if the cutoff period is three years?