A company has $280,000 to invest in either Project C or Project D. The cash flows are as follows:

Year	Project C	Project D
1	$75,000	$35,000
2	$75,000	$55,000
3	$75,000	$110,000
4	$75,000	$150,000
5	$75,000	$75,000

The discount rate is 7%.

Required:

1. For each project, calculate the:
   • Simple payback period
   • Discounted payback period
   • Net present value
   • Internal rate of return
   • Profitability index
2. Prepare a statement of retained earnings for the selected project.
3. Recommend which project the company should select based on the results of your calculations.