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Year 1 2 3 ABC Company is considering two investments, both of which cost $10,000. Investment A $12,000 $3,000 $3,000 Investment B $5,000 $5,000 $10,000

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Year 1 2 3 ABC Company is considering two investments, both of which cost $10,000. Investment A $12,000 $3,000 $3,000 Investment B $5,000 $5,000 $10,000 The cash flows are as follows: Required: [5 marks] (a) Which of the two investments should be chosen based on the payback period method? And why. [4 marks] (b) Give any one advantage and one disadvantage of using payback period method for evaluating investment proposal

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