Quattro, Inc. has the following projects available. The company has historically used a 4-year cutoff (payback period) for projects. The required return rate is 11%.
YearCash Flow ACash Flow B
0$(82,000) $(125,000)
1$16,000 $38,000
2$18,000$33,000
3$24,000$31,000
4$26,000$27,000
5$32,000$25,000
a) What is the payback period for each project?
b) What is the NPV for each project?
c) Which project, if any, should the program accept and why?