A Project X initially costing $ 250,000 generates following cash flows. If the cost of capital is 12%, calculate a) Net Present Value b) Profitability Index of the project.

Year	Cash flow
I	90,000
II	80,000
III	70,000
IV	60,000
V	50,000

Whether the project should be accepted or not? (8M)

4. ABC Company is considering two mutually exclusive projects. Both require an initial investment of $50,000 each and have a life of five years. The cost of capital of the company is 10% and the estimated net cash inflows of the two projects are as follows:

Year	Project A	Project B
1	20,000	30,000
2	22,000	27,000
3	28,000	22,000
4	25,000	25,000
5	30,000	20,000

Which project should be accepted as per

1. Discounted Payback method
2. Net Present Value methods
3. Internal Rate of Return