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Here are the expected cash flows for three projects: Year: 1 Project A B C 0 -6.300 -2.300 -6.300 Cash Flows (dollars) 2 +1.325 +1.325
Here are the expected cash flows for three projects: Year: 1 Project A B C 0 -6.300 -2.300 -6.300 Cash Flows (dollars) 2 +1.325 +1.325 0 +2.300 +1.325 +1.325 3 +3.650 +2.650 +3.650 4 0 +3.650 +5.650 a. What is the payback period on each of the projects? Project A Payback period years years years B b. If you use a cutoff period of 2 years, whi projects wo you accept? OOOOOOOO 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? O Project A O Project B Project C O 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.) Project NPV A $ B 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? O True O False
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