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1) A company is seeking to invest approximately $120 millions in new projects. After research three projects are considered candidates for construction. The after tax cash non discounted cash flow information for the three projects using a ten years operating life is, Initial Investment After tax cash flow millions ears 1-10 Project A Project B Project C $60 S110 $80 $18 S22 $15 Assume land, working capital and salvage equal to zero. Initial investment at time zero and yearly cash flow at end of the 10 year plant operation. Draw the three cash flows and calculate the important points for all. Hint: use cumulative cash, interest, and payback period 2) A company is seeking to invest approximately $100 millions in new projects. After research three projects are considered candidates for construction. The after tax cash flow information for the three projects using a ten years operating life is, After tax cash flow Salvage Initial Investment millions Land WC t A t B S15 $20 S12 S10 $100 S80 $10 S10 S10 S10 S10 Assume Initial investment at time zero and yearly cash flow at end of the 10 year plant operation. The minimum discount (interest) rate for the project has been set to 10%. Calculate: NPV (cumulative cash), DPBP (payback period), and DCFROR (interest rate) for each project. Determine which should be preferred

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