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Consider the following projects A and B: A B C D E 1 Cost of Capital: r= 8% 2 T= 0 1 2 3 3

Consider the following projects A and B:

A

B

C

D

E

1

Cost of Capital: r=

8%

2

T=

0

1

2

3

3

Project

C0

C1

C2

C3

4

A

-200

90

130

100

Please answer the following questions.

a. What is the project's NPV? (sample answer: 127.50)

b. What is the payback period? (sample answer: 1.38 years)

c. What is the discounted payback period? (sample answer: 1.38 years) d. What is the IRRs? (sample answer: 13.85%)

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