Project Management Prince2

2. Project Selection: (6 marks) Use the information in the following table to answer questions, 2a, 2b, and 2c. Note: Amounts shown in brackets are expenses and are therefore negative. Year 2 0 (10,000) 0 Project A _(100,000) Project B 1 0 3000 (50,000) 100,000 (50,000) 50,000 (100) 200 3 0 3000 (50,000) 100,000 (50,000) 250,000 (100) 200 3000 (50,000) 100,000 (50,000) 150,000 (100) 200 4 0 3000 (50,000) 100,000 (50,000) 350,000 (100) 200 5 0 3000 (50,000) 100,000 (50,000) 400,000 (100) 200 (500,000) Project C (1000) Project D a. Calculate the Payback periods for projects A, B, C and D. b. Which is the most favourable payback period? C. What other financial selection method would more accurately determine which project would the most profitable over 5 years, and explain why