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  3. 3. consider three possible projects your company c

3. Consider three possible projects your company could invest in, represented by their cashflows per...

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Finance

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3. Consider three possible projects your company could invest in, represented by their cashflows per year. B C Today Year 1 Year 2 Year 3 Year 4 Year 5 100 -200 -100 0 0 400 -100 50 100 100 50 50 -325 -100 0 150 250 450 (a) If the company wants to earn an annual rate of return of r, then they use a discount factor of 8 Ttr. Calculate the discount factor for r = 0.12. (b) Now, calculate the (net) Present Value of the three investment opportu- nities for the values of 8 you calculated above. (c) Now suppose the firm (CEO) is present biased, with B = 0.9. What will the firm select? What if B = 0.5

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