USE THE FOLLOWING PROJECT CASH FLOWS FOR QUESTIONS 6-10:

Project A Project B Project C Project D Project E

Today (20,000) (30,000) (7,500) (4,000) (6,000)

Year 1 10,000 6,000 2,000 2,000 750

Year 2 6,000 8,000 3,000 2,500 1,500

Year 3 4,000 10,000 4,000 3,000 2,250

Year 4 2,000 8,000 2,500 3,000

Year 5 1,000 6,000 2,000 3,750

Year 6 500 4,000 (8,000) 4,000

6. What is the payback period of project E?

7. What is the crossover rate between projects A and B?

8. The IRR of project D is 0%, is it a good project if the cost of capital is 10%?

9. What is the NPV of project C if the cost of capital is 6%

10.If A and C are repeatable, mutually exclusive projects, then which one is better if the WACC is 8%? a) Project A b) Project B