Question 2. (20 marks) (a) What is the payback period method, briefly explain? What is the payback criterion decision rule? Expected word count: 150 words (b) Swan fashions imposes a payback period method to its below international investment projects. If the company has the following two projects. According to payback, which project should be accepted, and which should be rejected? Year Cash flow (A) Cash flow (B) 0 -$75,000 -$125,000 1 $33,000 $29,000 2 $36,000 $32,000 3 $19,000 $35,000 4 $9000 $240,000 Question 3. (20 marks) Sweet memories flight school is presented with two mutually exclusive projects. The required return for both projects is 13%. Year Project A Project B 0 -$140,000 -$559,000 1 $61,500 $259,300 2 $93,400 $168,400 $68,100 $154,800 $40,500 $110,400 a. What is IRR for each project? 8 marks b. What is NPV for each project? 8 marks c. What if either of the projects should the company accept? 4 marks 34