A firm is considering two investment projects, each with the following cash flows:

• Project Alpha:

• Initial Investment: £25,000
• Year 1: £7,000
• Year 2: £8,000
• Year 3: £9,000
• Year 4: £10,000

• Project Beta:

• Initial Investment: £20,000
• Year 1: £6,000
• Year 2: £7,000
• Year 3: £8,000
• Year 4: £9,000

Requirements:

1. Calculate the Net Present Value (NPV) for each project using a discount rate of 10%.
2. Determine the Internal Rate of Return (IRR) for each project.
3. Compute the Profitability Index (PI) for both projects.
4. Analyze the financial viability of each project.
5. Provide a recommendation based on the results of the NPV, IRR, and PI calculations.