(a)Define and explain the Payback method of project evaluation. Over 50% of chief financial officers surveyed indicate that their firm uses this method of project evaluation. Discuss the advantage and disadvantages of this method. Use numeric examples to assist your explanations.

(b) Define an Efficient Market. What factors would tend to promote efficiency? Outline the implications of market efficiency for (i) Directors and Managers of firms and (ii) Market regulators.