Suppose you were the financial Accountant for Max Company Pty. Ltd. The board of directors promoted you to position of Finance manager considering the satisfactory services that you rendered to the company. The CEO has asked you to analyze two proposed capital investments, Projects Naru and Oheema. The cost of capital for each project is 12%.

The projects initial cost and expected net cash flows are as follows. The two projects are mutually exclusive projects.

Year	Cash Flow Naru ($)	Cash Flow Oheema ($)
0	-220000	-60000
1	40000	42900
2	52000	30800
3	48000	153000
4	200000	14200

1. If you apply the pay criterion, which project will you choose? Why?
2. If you apply the NPV criterion, which project will you choose? Why?
3. If you apply the RR criterion, which project will you choose? Why?

Please give the answers with explanations