1 1 Investment A: Year: 0 2 Cash flow: 3 4 - $14.000 5 $5,500 $5,500 $5,500 $5,500 $5,500 Investment B: Year: 0 2 3 4 5 Cash flow: - $15,000 $5,000 $5,000 $5,000 $5,000 $5,000 Investment C: Year: 0 2 3 4 5 Cash flow: - $18,000 $12,000 $2,500 $2.500 $2,500 $2,500 The cash flows for three projects are shown above. The cost of capital is 7.8%. If an investor decided to take projects with a payback period two years or less, which of these projects would he take? 1 OOOO A Investment B. Investment B C. Investment OD none of these investments
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