A company has $250,000 to invest in either Project A or Project B with the following cash flows:

Year	Project A	Project B
1	$50,000	$20,000
2	$50,000	$40,000
3	$50,000	$80,000
4	$50,000	$150,000
5	$50,000	$30,000

The current cost of capital is 10%.

Required:

• Calculate for each project the:

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

• Based on your results in (1), advise the firm on which project to undertake.