Ashley needs to pay off her gambling debt and can settle her debt by making a payment of $12,000 now and a final payment of $32,000 in 4 years. Alternatively, the debt can be settled by payments of $2,700 every three months for five years, with the first payment today and last payment in exactly 5 years. Interest is 10% p.a. compounded quarterly. a) Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion. b) Assume project A would provide the company with an immediate savings of $40,000 and project B would provide the company with an immediate savings of $45,000. Calculate the profitability index for both alternatives. Which alternative is preferable using the profitability index ratio?