A company can invest $700,000 in either Project S or Project T. The projected cash flows are:

Year	Project S	Project T
1	$300,000	$75,000
2	$300,000	$150,000
3	$300,000	$225,000
4	$300,000	$300,000
5	$300,000	$75,000

The firm’s cost of capital is 10%.

Required: a. Calculate for each project:

• Simple payback period
• Discounted payback period
• Net present value
• Internal rate of return
• Profitability index

b. Provide a recommendation on which project the company should undertake based on the financial metrics.