31. Investment Criteria. Elm City Electronics is consid- ering two mutually exclusive projects that differ greatly on the required investment and projected cash flows. The initial investment required for project I is $250,000 while for project II it is $25,000. Projected after-tax cash flows are shown below: (LOI, LO2, LO3, L04, LO5) Cash Flows, $ Year Project II Project I 12,000 1 15,000 2 18,000 8,000 3 18,000 6,000 4 30,000 6,000 5 5 250,000 500 a. The opportunity cost of capital for Elm City is 6%. Decide which project you would choose by apply- ing each of the following decision criteria sepa- rately. Explain your reasoning in each case: (1) payback period, (2) discounted payback period, (3) NPV, (4) IRR, and (5) profitability index. b. Which project would you eventually choose? Explain your answer. 100