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

The company estimates its cost of capital is 18 per cent. Required: Calculate a) The payback period for each project. b) The accounting rate of return for each project. c) The net present value of each project. d) Which project should be accepted give reasons. e) Explain the factors management would need to consider, in addition to the financial factors, before making a final decision on a project.