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Please Assist with the following Here are the expected cash flows for three projects: Year: 4 Project A B C 6,700 2,700 6,700 Cash Flows
Please Assist with the following
Here are the expected cash flows for three projects: Year: 4 Project A B C 6,700 2,700 6,700 Cash Flows (dollars) 1 2 3 + 1,425 + 1,425 + 3,850 0 + 2,700 + 2,850 + 1,425 + 1,425 + 3,850 + 3,850 + 5,850 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 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? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? Project C Project A Years Project B Years a. Years Payback period 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 11%, 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? eStep by Step Solution
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