A company has the option to invest in two different projects. Project K requires an initial investment of $18,000 and Project L requires $20,000. Project K is expected to generate cash flows of $4,000, $5,000, $6,000, $7,000, and $8,000 over the next five years. Project L is expected to generate cash flows of $6,000, $5,000, $7,000, $6,000, and $5,000 over the next five years.

Requirements:

• Compute the NPV for each project using a discount rate of 10%.
• Determine the payback period for each project.
• Calculate the IRR for each project.
• Which project should be chosen based on the NPV?