A company has $600,000 to invest in either Project O or Project P with the following cash flows:

Year	Project O	Project P
1	$200,000	$50,000
2	$200,000	$100,000
3	$200,000	$150,000
4	$200,000	$200,000
5	$200,000	$50,000

The cost of capital is 12%.

Required:

• Calculate:

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

• Based on your analysis, suggest which project to proceed with.