A firm is considering a $220,000 investment in either Project K or Project L with the following cash flows:

Year	Project K	Project L
1	$70,000	$18,000
2	$70,000	$25,000
3	$70,000	$50,000
4	$70,000	$110,000
5	$70,000	$48,000

The firm's cost of capital is 13%.

Required:

a) Calculate the following for each project:

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

b) Advise which project should be selected based on your calculations.