Exercise 24-16 (Algo) Investment decisions; no calculations LO P1, P3, P4 Lopez Company is considering three alternative investment projects below: Payback period Project 1 5.3 years Project 2 Project 3 5.8 Years 5.0 Years Net present value $ 26,800 $ 33,800 Internal rate of return 14.3% 13.2% $ 19,800 12.6% Which project is preferred if management makes its decision based on (a) payback period, (b) net present value, and (c) internal rate of return? Preferred Investment a. Payback period Project 3 b. Net present value Project 2 c. Internal rate of return Project 1 Reason