Show transcribed image text 1. NPV and payback decisions Berhmann Foods is evaluating a project with the following annual net cash flows: Because Behrmann is a small firm with limited resources, its managers worry about how long capital will be tied up in projects. What is this project's payback period? Assume that Behrmann's cash flows are spaced evenly throughout the year. 4.12 years 3.69 years 4.01 years 3.51 years 3.86 years Some of Behrmann's managers use a general guideline when evaluating projects: accept projects that pay back their investment in less than four years. If you use this ''payback rule'' to evaluate the project described above, should Behrmann accept the project? No Yes If the project's WACC is 10.5%, what is its NPV? -$62.98 -$56.40 -$53.07 -$66.22 -$78.93 If Behrmann's managers decide to accept the project based on its impact on shareholder value, should they accept the project? Yes No