Cash Flows (dollars) Project Year: 0 1 2 3 4 A ?5,200 +1,200 +1,200 +2,800 0 B ?

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Cash Flows (dollars) Project Year: 0 1 2 3 4 A ?5,200 +1,200 +1,200 +2,800 0 B ?1,200 0 +1,200 +2,200 +3,200 C ?5,200 +1,200 +1,200 +2,800 +5,200 ________________________________________ a.What is the payback period on each of the above projects? Project Payback A 3 years B 2 years C 3 years If the opportunity cost of capital is 9%, calculate the NPV for project A. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPVA= d-2.If the opportunity cost of capital is 9%, calculate the NPV for project B. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPVB= d-3.If the opportunity cost of capital is 9%, calculate the NPV for project C. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPVC=

Explanation / Answer

Payback Project A: 4 years Project B: 2 Years Project C: 3 Years NPV Project A = -5,200 +1,200/(1+.09)^1 +1,200/(1+.09)^2 +2,800/(1+.09)^3 +0/(1+.09)^4 = -926.95 Project B = -1,200+0/(1+.09)^1 +1,200/(1+.09)^2 +2,200/(1+.09)^3 +3,200/(1+.09)^4 =3775.78 Project C = -5,200 +1,200/(1+.09)^1 +1,200/(1+.09)^2 +2,800/(1+.09)^3 +5,200/(1+.09)^4 = 2756.86

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