Alex runs a small company called Ask Your Neigbour Pty Ltd, which hires equipment for an hour charge. Alex has had enquires from customers looking to hire an elevated work platform (EWP) and a small bobcat. Alex currently does not have either of these but would like to expand his equipment available for hire. Alex can only afford either an EWP or a bobcat and is unsure which is the best investment. Alex provides the following estimates from his research:

Year	EWP	Bobcat		Discount rate 10%
0	(142,500)	(210,000)		1
1	52,500	63,750		0.90909
2	57,000	75,000		0.82645
3	65,500	86,250		0.75132

Additional information: the relevant cash inflows for both would be received consistently thoughout the year/s.

Required: After conducting your analysis, answer the following questions.

a) Does the EWP or the Bobcat have the shortest Payback Period?

b) If the cost of capital for Ask Your Neighbour Pty Ltd is 10%, which has the highest Net Present Value at the end of year 3?

c) Based on your analysis, should Alex purchase the EWP or the Bobcat?