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Consider the following two projects: Cash flows Project A Project B C 0 $ 150 $ 150 C 1 60 75 C 2 60 75

Consider the following two projects:

Cash flows Project A Project B
C0 $ 150 $ 150
C1 60 75
C2 60 75
C3 60 75
C4 60

  1. What is the payback period of each project?
  2. Is the project with the shortest payback period also the one with the highest NPV?
  3. What are the internal rates of return on the two projects?

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