A company has $220,000 to invest in either Project I or Project J. The following are the cash flows:

YearProject IProject J

1$75,000$25,000

2$75,000$35,000

3$75,000$65,000

4$75,000$125,000

5$75,000$55,000

The cost of capital is 13%.

Required: a) Calculate the following for both projects:

1.Simple payback period

2.Discounted payback period

3.Net present value

4.Internal rate of return

5.Profitability index

b) Advise the company on which project to select based on your calculations.