Examine these three projects and accept the projects with a payback period of 2 years or less.

And, suppose the cost of capital is 8%.

Project	Initial Cost	CF1	CF2	CF3
A	-5000	1000	1500	10000
B	-5000	2000	3600	0
C	-5000	3600	2000	0

1.For which of these projects, there exists a conflict of the investment decisions between using the NPV and using the payback rule? A. ONLY A B. A & B C. A & C D. A, B & C 2.Can you tell which of the following statements are true about the payback rule?

I.The payback rule may reject positive NPV investments.

II.The payback rule ignores cash flows beyond the cutoff timeframe.

III. The payback rule cannot tell you how much profits would be added by the project. A. Only I B. I and II C. I and III D. I, II and III