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3. (a) Discounted cash flow analysis takes into account the time value of money. The projected cash flow for Project X has been assessed and is given in the following table after allowance for taxation and depreciation (figures in parenthesis denote expenditure): Year Project X 0 (200,000) 20,000 2 20,000 3 50,000 4 50,000 5 50,000 6 50,000 70,000 8 70,000 Using a discount rate of 10 %, determine the payback time, cumulative present value, discounted net present value of the cash flow (where NPV = C/(1+r)^) and return on investment for Project X. [8] 7 (b) In addition to payback time, NPV and return on investment, what other method is commonly used for project evaluation and briefly explain why it is considered to be a useful evaluation technique. [2]