1. Below are the cash flows for Lalaland Company and Lilycove Company

Year	Lalaland ($)	Lilycove ($)
0	(35,000)	(40,000)
1	25,000	14,000
2	12,000	14,000
3	10,000	14,000
4	12,000	14,000

a) Calculate the payback period for both companies. (4 marks)

b) Calculate the profitability index for each company. (4 marks)

c) If the cost of capital is 10%, calculate the net present value (NPV) for both companies. (6 marks)

d) Which company should be selected if the company are, 1) independent? 2) mutually exclusive? Provide explanation to your answers. (6 marks)