The Roll Company Ltd is thinking about investing in a large machinery that will see the company becoming one of the top companies within the manufacturing industry. The following information relates to the proposed machinery for investment:

Machine A Machine B Machine C

Initial investment in project $90,000 $90,000 $90,000

Annual cash increase in operations:

Year 1 80,000 45,000 90,000

Year 2 10,000 45,000 0

Year 3 45,000 45,000 0

The company's cost of capital is 14%. Estimated useful life of each project is

Required:

(a) Compute the following for each project:

(i) Payback period (12 marks)

(ii) Net present value (12 marks)

(iii) Profitability index (6 marks)