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Here are the expected cash flows for three projects: Cash Flows (dollars) nts Project Year 0 Year 1 Year 2 Year 3 Year 4
Here are the expected cash flows for three projects: Cash Flows (dollars) nts Project Year 0 Year 1 Year 2 Year 3 Year 4 A -5,600 +1,150 +1,150 +3,300 0 B -1,600 0 +1,600 +2,300 eBook +3,300 C -5,600 +1,150 +1,150 +3,300 +5,300 Print a. What is the payback period on each of the projects? ferences b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 9%, calculate the NPV for projects A, B, and C. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. d-2. Which projects have positive NPVs? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? a. Payback period Project A Years Project B Years b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 9%, calculate the NPV for projects A, B, and C. d-2. Which projects have positive NPVs? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? < Prev 6 of 10 Nov
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