Analyze the following cash flows for project K and project L:

Project K:

• Year 0: -$110,000
• Year 1: $35,000
• Year 2: $40,000
• Year 3: $45,000
• Year 4: $50,000

Project L:

• Year 0: -$130,000
• Year 1: $36,000
• Year 2: $41,000
• Year 3: $46,000
• Year 4: $51,000

a. Determine the NPV, IRR, and payback period for both projects, assuming a discount rate of 8 percent.

b. Discuss which project(s) should be chosen if they are independent, and which should be chosen if they are mutually exclusive.