Here are the expected cash flows for three projects:

	Cash Flows (dollars)
Project	Year:	0			1			2			3			4
A			6,000			1,250			1,250			3,500			0
B			2,000			0			2,000			2,500			3,500
C			6,000			1,250			1,250			3,500			5,500

a.	What is the payback period on each of the projects?

Project	Payback period
A	___ years
B	____ years
C	____ years

b.

If you use a cutoff period of 2 years, which projects would you accept?

	Project A
	Project B
	Project C
	Project A and Project B
	Project B and Project C
	Project A and Project C
	Projects A, B, and C
	None

c.

If you use a cutoff period of 3 years, which projects would you accept?

	Project A
	Project B
	Project C
	Project A and Project B
	Project B and Project C
	Project A and Project C
	Projects A, B, and C
	None

d-	If the opportunity cost of capital is 9%, calculate the NPV for projects A, B, and C. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project	NPV
A	$ _____
B	$ _____
C	$ _____

d-2.

Which projects have positive NPVs?

	Project A
	Project B
	Project C
	Project A and Project B
	Project B and Project C
	Project A and Project C
	Projects A, B, and C
	None

e.

"Payback gives too much weight to cash flows that occur after the cutoff date." True or false?

	True
	False