Here are the expected cash flows for three projects:

	Cash Flows (dollars)
Project	Year:	0				1				2				3				4
A			5,500			+	1,125			+	1,125			+	3,250				0
B			1,500				0			+	1,500			+	2,250			+	3,250
C			5,500			+	1,125			+	1,125			+	3,250			+	5,250

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

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-1. If the opportunity cost of capital is 11%, 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.)

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