Can you help with the task below:

Case

Your job in BIGCONS, a financial management consulting group, is to help CFOs to implement the right tools in capital budgeting decisions. You were recently hired by TenBack Inc, a technology firm, to assist John McGill, the firm's CFO to choose the right investment projects. When you meet with John McGill, he comes up with several questions about investment rules. Help him by offering your answers to the following questions he posed.

Questions

1. I hear a lot about various investment rules like NPV, IRR, payback period and discounted payback period. Could you please help me to understand what are the shortcomings and the advantage of each one of them?
2. If a project with conventional cash flows has a payback period less than the project's life, can you definitively state the algebraic sign of the NPV? If you know that the discounted payback period is less than the project's life, what can you say about the NPV? Could you please explain this to me?
3. Suppose a project has conventional cash flows and a positive NPV. What do you know about its payback? Its discounted payback? Could you please explain this to me?
4. What difficulties might come up in actual applications of these investment criteria? Which one would be the easiest to implement in actual applications? The most difficult?

Follow up

As a follow-on discussion, you could consider whether the capital budgeting criteria we discussed are applicable to other forms of businesses beyond corporations? How should entities like small businesses and sole proprietorships make capital budgeting decisions? Are there any adjustments in the investment criteria that you deem necessary for such entities?