Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hi, help with question C, d-1, and D-2. Here are expected cash flows for three projects: Cash Flows dollars) Project Year: 0 1 2 3

hi, help with question C, d-1, and D-2.

Here are expected cash flows for three projects:

Cash Flows dollars)

Project Year: 0 1 2 3 4

A 6,100 +1,275 +1,275 +3,550 0

B 2,100 0 +2,100 +2,550 +3,550

C 6,100 +1,275 +1,275 +3,550 +5,550

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

A: 3

B: 2

C: 3

b.If you use 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 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 12%, calculate the NPV for projects A, B, and C.(Negative amounts should be indicated by a minus sign. Do not round intermediate . Round your answers to 2 decimal places.)

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mergers, Acquisitions and Other Restructuring Activities

Authors: Donald DePamphilis

8th edition

9780128024539, 128013907, 978-0128013908

More Books

Students also viewed these Finance questions