A business has $100,000 to invest in either Project R or Project S with the following cash flows:

Project R:

• Year 1: $20,000
• Year 2: $30,000
• Year 3: $40,000
• Year 4: $50,000
• Year 5: $60,000

Project S:

• Year 1: $10,000
• Year 2: $20,000
• Year 3: $30,000
• Year 4: $40,000
• Year 5: $50,000

The discount rate is 14%.

Required:

1. Compute for each project:
   • Simple payback period
   • Discounted payback period
   • Net present value
   • Internal rate of return
   • Profitability index
2. Advise the company on which project to invest in.