QUESTION THREE [25] Interio is an interior decorating entity. The company has of two projects to invest in, project A or project B. Interio research team has provided the following details relating to these two projects: Project A Project B R15 000 16 000 Investment required Expected life time Required rate of return 4 years 4 years 16% 15% The annual cash inflows are as follows: Project A Project B Year R R 1 4700 5700 2 4800 5700 3 6800 5700 4 5500 5700 The following discount factors are provided for both projects: Year Project A Project B 1 0.870 0.862 2 0.756 0.743 3 0.658 0.641 4 0.572 0.552 (9) Required: 3.1 Which project is more lucrative if the payback rule applied? 3.2 Determine which project is more lucrative if the NPV rule is applied. 3.3 Discuss the shortcoming of the NPV as method of project evaluation (12)