21. Petram is a company that manufactures aircraft parts. The company is considering various investment projects that may improve operational efficiency, and has already spent 30,000 gathering relevant data. It has now shortlisted three projects and asked you to recommend the best option. You have been provided with the following information about the projects: . Project I will last for 4 years. The initial outlay is 950,000 and the forecast operating cash inflow from the project is 350,000 for the first 2 years, 425,000 in year 3 and 150,000 in the last year. Annual depreciation expense associated with this project is 237,500. Project II will last for 4 years. The initial outlay is 1,150,000 and the forecast operating cash inflow from the project is 550,000 in the first year and 350,000 for the following three years. Annual interest expense associated with this project is 45,000. Project III will last for 4 years. The initial outlay is 850,000 and the forecast operating cash inflow from the project is 250,000 in the first year, then increasing by 40,000 each year in years 2, 3, and 4. The firm's cost of capital is 10% per year. Required (a) Evaluate each of the three projects using Payback Period. (6 marks) (b) Evaluate each of the three projects using Net Present Value. (9 marks) (c) Explain which projects should be accepted and why. (5 marks) (Total 20 marks)