Alpha Ltd is considering three mutually exclusive projects:

• Initial investment: $15,000 each, Life: 5 years, Required return: 10%
• Cash flows:
  • Project X: Year 1: $5,000, Year 2: $5,000, Year 3: $5,000, Year 4: $5,000, Year 5: $5,000
  • Project Y: Year 1: $7,000, Year 2: $6,000, Year 3: $4,000, Year 4: $3,000, Year 5: $2,000
  • Project Z: Year 1: $2,000, Year 2: $4,000, Year 3: $6,000, Year 4: $6,000, Year 5: $7,000
• Requirements:

1. Compute the NPV for each project.
2. Compute the Profitability Index (PI) for each project.
3. Determine the payback period for each project.
4. Rank the projects based on NPV and PI.