123 Retailers is reviewing two potential investments, Project X1 and Project X2.

Project X1:

Year	Cash Flow ($)
Year 0	-100,000
Year 1	20,000
Year 2	25,000
Year 3	30,000
Year 4	35,000

Project X2:

Year	Cash Flow ($)
Year 0	-120,000
Year 1	30,000
Year 2	35,000
Year 3	40,000
Year 4	45,000

The discount rate for Project X1 is 7%, and for Project X2 is 9%.

Requirements: a) Calculate the payback period for each project. b) Decide which project should be selected if the company requires a payback period of 4 years and the projects are mutually exclusive. c) Calculate the profitability index for each project. d) Determine which project should be accepted based on the profitability index rule if the projects are mutually exclusive. e) Calculate the NPV for each project and recommend which project should be accepted based on NPV.