A company has $310,000 to invest in either Project R or Project S. The cash flows are as follows:

Project R generates cash flows of $90,000 each year for five years. Project S generates cash flows of $30,000 in the first year, $60,000 in the second year, $120,000 in the third year, $170,000 in the fourth year, and $80,000 in the fifth year. The discount rate is 10%.

Required:

1. For each project, calculate the:
   • Simple payback period
   • Discounted payback period
   • Net present value
2. Prepare a statement of changes in equity for the chosen project.
3. Recommend which project the company should select based on the results of your calculations.