The following information relates to three possible capital expenditure projects. Because of capital rationing only one project can be accepted.

	Project
	A	B	C
Initial Cost	RM200,000	RM230,000	RM180,000
Useful Life	5 years	5 years	4 years
Salvage Value Expected	RM10,000	RM15,000	RM8,000
Expected Cash Inflows:
Year 1	RM80,000	RM100,000	RM55,000
Year 2	RM70,000	RM70,000	RM65,000
Year 3	RM65,000	RM50,000	RM95,000
Year 4	RM60,000	RM50,000	RM100,000
Year 5	RM55,000	RM50,000

The company estimates its cost of capital is 18% and discount factors are:

Year 1	0.847
Year 2	0.718
Year 3	0.609
Year 4	0.516
Year 5	0.437

Required:

1. Calculate the payback period for each project.
2. Calculate the accounting rate of return for each project.
3. Calculate the net present value of each project.
4. Which project should be accepted? Give reasons.
5. Explain the factors management would need to consider - in addition to the financial factors before making a final decision on a project.