Consider the following cash flows for two investment projects, C and D:

• Project C:
  • Initial Investment: $18,000
  • Year 1: $4,000
  • Year 2: $7,000
  • Year 3: $8,000
  • Year 4: $10,000
• Project D:
  • Initial Investment: $14,000
  • Year 1: $5,000
  • Year 2: $6,000
  • Year 3: $6,000
  • Year 4: $6,000

(a) Determine the NPV for both projects using a discount rate of 11%.

(b) State which project you would accept.

(c) If the projects are independent, what is your decision?

(d) Calculate the payback period for both projects.

(e) Determine the profitability index for both projects.