Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2 3 4 1,250 3,500 - 6,000 - 2,000 - 6,000 1,250 2,000 1,250 +3,500 5,500 2,500 1,250 3,500 a. What is the payback period on each of the projects? 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. (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? Project A Years Project B Project C Years Payback period a. Years b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? 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? |. . "Payback gives too much weight to cash flows that occur after the cutoff date." True or false