The cash flows associated with three different projects are as follows:

Cash Flows	Alpha ($ million)	Beta ($ million)	Gamma ($ million)
Initial Outflow	-1.5	-0.4	-7.5
Year 1	0.3	0.1	2.0
Year 2	0.5	0.2	3.0
Year 3	0.5	0.2	2.0
Year 4	0.4	0.1	1.5
Year 5	0.3	-0.2	5.5

Calculate the payback period of each investment.

Which investments does the firm accept if the cutoff payback period is three years? Four years?

If the firm invests by choosing projects with the shortest payback period, which project would it invest in?

If the firm uses discounted payback with a 15% discount rate and a 4-year cutoff period, which projects will it accept?

One of these projects should almost certainly be rejected, but it may be accepted if the firm uses payback analysis. Which one?