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    Calculation of Pay back period, Net present value

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    Consider the following projects:
    Cash Flows ($)
    Project C0 C1 C2 C3 C4 C5
    A -1,000 +1,000 0 0 0 0
    B -2,000 +1,000 +1,000 +4,000 +1,000 +1,000
    C -3,000 +1,000 +1,000 0 +1,000 +1,000

    a. If the opportunity cost of capital is 10 percent, which projects have a positive NPV?
    b. Calculate the payback period for each project.
    c. Which project(s) would a firm using the payback rule accept if the cutoff period is three years?

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    https://brainmass.com/business/net-present-value/calculation-of-pay-back-period-net-present-value-221024

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    Project C0 C1 C2 C3 C4 C5
    A -1,000 1,000 0 0 0 0
    B -2,000 1,000 1,000 4,000 1,000 1,000
    C -3,000 1,000 1,000 0 1,000 1,000
    a. If the opportunity cost of capital is 10 percent, which projects have a positive NPV?
    b. Calculate the payback period for each project.
    c. Which project(s) would a firm using the payback rule accept if the cutoff period is three ...

    Solution Summary

    The answer contains the computation of pay back period and Net present value

    $2.19