
Arturo O. answered 06/22/16
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Let us test the 3 in turn:
Let (1) be false, and (2) and (3) be true. If (1) is false then the treasure is on this island. This is logically compatible with (2) and (3) being true.
Let (2) be false, and (1) and (3) be true. If (2) is false, then the treasure is on the island to the northwest. This is logically compatible with (1) being true, but not with (3) being true.
Let (3) be false, and (1) and (2) be true. If (3) is false, then the treasure is not buried here. This is logically compatible with (1) being true, but there is not enough information to say if it is compatible or not with (2) being true, unless this island and the island to the northwest are the only possible burial places. I assume they are. If so, then (3) being false is logically incompatible with (2) being true.
In summary, only (1) false with (2) and (3) true are logically compatible, so the treasure must be on this island.