The$$ Bar$-$None Manufacturing Co$.$ manufactures fence panels used in cattle feed lots throughout the Midwest. $$ Bar$-$None's management is considering three investment projects for next year but$$ doesn't want to make any investment that requires more than three years to recover the$$ firm's initial

investment.

a$.$Given$$ Bar$-$None's three$-$year payback$$ period, which of the projects will qualify for$$ acceptance?

b$.$Rank the three projects using their payback period. Which project looks the best using this$$ criterion? Do you agree with this$$ ranking? Why or why$$ not?

c$.$If$$ Bar$-$None uses a discount rate of $10\mathrm{.}5$ percent to analyze$$ projects, what is the discounted payback period for each of the three$$ projects? If the firm still maintains its$$ three$-$year payback policy for the discounted$$ payback, which projects should the firm$$ undertake?

Year Project A Project B Project C

$0$ $$(900)$ $$(9,500)$ $$(5,300)$

$1$ $$650$ $$5,500$ $$1,200$

$2$ $$225$ $$2,500$ $$1,200$

$3$ $$190$ $$2,500$ $$2,500$

$4$ $$80$ $$2,500$ $$2,500$

$5$ $$470$ $$2,500$ $$2,500$