3. Consider the following projects:

(a) Given an opportunity cost of capital of 8 %, which projects result in a positive NPV?

(b) Calculate the payback period for each project, if the cut-off period is three years. Which project should be accepted?

(c) Briefly discuss the advantages and disadvantages of using the payback and NPV methods of investment appraisal.

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Project Project Project Year A B C 0 (10,000) (20,000) (30,000) 1 10,000 10,000 10,000 2345 0 10,000 10,000 0 10,000 0 0 10,000 10,000 0 10,000 10,000