Question 3 (5 points): This question is from CHAPTER 5 A&B Enterprises is t

Question 3 (5 points): This question is from CHAPTER 5

A&B Enterprises is trying to select the best investment from among three alternatives. Each alternative involves an initial investment of
$100000. Their cash flows follow:

Year A B C

1 $10000 $50000 $25000

2 20000 40000 25000

3 30000 30000 25000

4 40000 0 25000

5 50000 0 25000

(a). Which investment will you select using the payback method? Why?
(b). Which investment will you select using the net present value method? (Using a 10% discount rate. Be sure to compute NPV for all three projects
(c). Which investment will you select using the internal rate of return method? Please compute IRR for the above three projects.