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Consider the following projects: Cash Flows ($) Project A Co C1 C C3 CA C5 BU -2,600 -5,200 2,600 0 0 0 0 2,600
Consider the following projects: Cash Flows ($) Project A Co C1 C C3 CA C5 BU -2,600 -5,200 2,600 0 0 0 0 2,600 2,600 5,600 2,600 2,600 C -6,500 2,600 2,500 2,600 2,600 a. If the opportunity cost of capital is 10%, which project(s) 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? d. Calculate the discounted payback period for each project. e. Which project(s) would a firm using the discounted payback rule accept if the cutoff period is three years?
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