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Problem &-29 Payback and Here are the expected cash flows for three projects Cash Flows (dollars) Year 2 Project A B C Year 0 -5.500 -1,500 -5,500 Year 1 +1,125 0 +1,125 +1,125 +1,500 +1,125 Year 3 +3,250 +2.250 +3,250 Year 4 0 +3,250 +5,250 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 11%, calculate the NPV for projects A, B, and C. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. d-2. Which projects have positive NPVs? e. "Payback gives too much weight to cash flows that occur after the cutoff date "True or false? a. Payback penod b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1. If the opportunity cost of capital is 11%, calculate the NPV for projects A, B, and C. d-2. Which projects have positive NPVs? e. "Payback gives too much weight to cash flows that occur after the cutoff date." True or false? Project A Years Project B Years Project C Years

Here are the expected cash flows for three projects a. What is the payback period on each of the projects? b. If you use the poyback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects wil you accep? d-1. If the opportunity cost of copital is 11%, calculate the NPV for projects A, B, and C Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. d.2. Which projects hove positive NPVs? e. "Payback gives too much weight to cesh flows that occur after the cutoff date" True or false? Problem 8-29 Poyback and NPV (LO 1, LO4) Here are the expected cash flows for three projects a. What is the poybock petiod on each of the projocts? b. If you tise the poypack rule with a cutoff period of 2 yars, which progects wil you accept? c. If you use a cutoft period of 3 years, which projects wil you occepol? d.1. If the opportunity cost of copitel is 11% colculate the NPV for progects A. a, and C Note, Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Found your answers to 2 decimal places. d.2. Which progects heve positive NPV Vs? Here are the expected cash flows for three projects a. What is the payback period on each of the projects? b. If you use the poyback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects wil you accep? d-1. If the opportunity cost of copital is 11%, calculate the NPV for projects A, B, and C Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. d.2. Which projects hove positive NPVs? e. "Payback gives too much weight to cesh flows that occur after the cutoff date" True or false? Problem 8-29 Poyback and NPV (LO 1, LO4) Here are the expected cash flows for three projects a. What is the poybock petiod on each of the projocts? b. If you tise the poypack rule with a cutoff period of 2 yars, which progects wil you accept? c. If you use a cutoft period of 3 years, which projects wil you occepol? d.1. If the opportunity cost of copitel is 11% colculate the NPV for progects A. a, and C Note, Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Found your answers to 2 decimal places. d.2. Which progects heve positive NPV Vs

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