1. What are the problems associated with using the payback period as a means of evaluating cash flows? 2. Why is NPV considered to be a superior method of evaluating cash flows from a project? 3. Global Toys, Inc. imposes a cutoff of 3 years for its international investment projects. If the company has the following two projects available, should it accept either of them? What are the payback periods for each project? Year Cash Flow Project A Cash Flow Project B 0 -$60,000 -$105,000 1 $23,000 $21,000 2 $28,000 $2,600 3 $19,000 $29,000 4 $9,000 $260,000