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Consider the following projects: Cash Flows ($) Project C 0 C 1 C 2 C 3 C 4 C 5 A 2,000 2,000 0 0

Consider the following projects:

Cash Flows ($)
Project C0 C1 C2 C3 C4 C5
A 2,000 2,000 0 0 0 0
B 4,000 2,000 2,000 5,000 2,000 2,000
C 5,000 2,000 1,300 0 2,000 2,000

a. If the opportunity cost of capital is 12%, which project(s) have a positive NPV?

Positive NPV project(s)

Project A
Project B
Project C
Projects A and B
Projects A and C
Projects B and C
Projects A, B, and C
No project

b. Calculate the payback period for each project: (Round your answers to 2 decimal places. If a project never pays back, enter "0".)

Project A year(s)
Project B year(s)
Project C year(s)

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

Project(s) accepted (Click to select)Project AProject BProject CProjects A and BProjects A and CProjects B and CProjects A, B, and CNo project

d. Calculate the discounted payback for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places. If a project never pays back, enter "0".)

Project A year(s)
Project B year(s)
Project C year(s)

e. Which project(s) would a firm using the discounted payback rule accept if the cutoff period were three years?

Project(s) accepted (Click to select)Project AProject BProject CProjects A and BProjects A and CProjects B and CProjects A, B, and CNo project

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