Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / A firm is considering the following projects

A firm is considering the following projects

Finance

A firm is considering the following projects. Its opportunity cost of capital is 9%. 
                                                    Cash Flows,

 Project        Time:        0                 1                 2             3            4

A                              -6,200         +1,300        +1,300     +3,600       0

B                              -2,200              0            +2,200      +2,600     +3,600

C                              -6,200         +1,300        +1,300      +3,600     +6,200 
a) What is the payback period on each project? 
 
What is the discounted payback period on each project? (Round your answers to 2 decimal places).

b) Given that you wish to use the payback rule with a cutoff period of 2 years, which projects would you accept? 

c) If you use a cutoff period of 3 years with the discounted payback rule, which projects would you accept? 
d) Which projects have positive NPVs? 
e) "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? 

Option 1

Low Cost Option
Download this past answer in few clicks

4.96 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE