Company X is considering two projects, E and F. Project E costs $900 and has future cash flows of $400, $450, and $500 over the next three years. Project F costs $1,000 and has cash flows of $300, $500, and $700 for the next three years.

1. Compute the net present value for each project at a discount rate of 8%.
2. Determine which project has a higher NPV.
3. Calculate the profitability index for both projects.
4. Identify the project with the better profitability index and justify the decision.