Consider an investment decision involving $150,000 in either Project G or Project H with the following cash flows:

Project G:

•Year 1: $60,000

•Year 2: $60,000

•Year 3: $60,000

•Year 4: $60,000

•Year 5: $60,000

Project H:

•Year 1: $20,000

•Year 2: $40,000

•Year 3: $90,000

•Year 4: $130,000

•Year 5: $70,000

The discount rate is 11%.

Required: a) For each project, calculate:

1.Payback period

2.Discounted payback period

3.Net present value

4.Internal rate of return

5.Profitability index

b) Recommend which project should be undertaken.