A firm is considering investing $450,000 in either Project G or Project H. The projected cash flows are:

Project G:

• Year 1: $90,000
• Year 2: $80,000
• Year 3: $70,000
• Year 4: $60,000
• Year 5: $50,000

Project H:

• Year 1: $60,000
• Year 2: $70,000
• Year 3: $80,000
• Year 4: $90,000
• Year 5: $100,000

The discount rate is 16%.

Required:

1. For each project, calculate:
   • Payback period
   • Discounted payback period
   • Net present value
   • Internal rate of return
   • Profitability index
2. Based on your analysis, advise the firm on which project to undertake.