A firm has $400,000 to invest in either Project E or Project F with the following cash flows:

• Project E: Year 1: $60,000, Year 2: $70,000, Year 3: $80,000, Year 4: $100,000, Year 5: $120,000
• Project F: Year 1: $20,000, Year 2: $40,000, Year 3: $90,000, Year 4: $150,000, Year 5: $200,000

The cost of capital is 8%.

Required:

• Calculate:

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

Advise the firm on the preferable project.