Lopez Company is considering three alternative investment projects below: Payback period Net present value Project 1 3.5 years $ 25,000 12.5% Project 2 4.0 Years $ 32,000 Project 3 3.2 Years $ 18,000 10.8% Internal rate of return 11.4% 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 Reason a. Payback period b. Net present value c. Internal rate of return