Financial Decision Making Project Tau:

• Initial Investment: $75,000
• Cash Flows:
  • Year 1: $20,000
  • Year 2: $22,000
  • Year 3: $24,000
  • Year 4: $26,000

Project Upsilon:

• Initial Investment: $85,000
• Cash Flows:
  • Year 1: $18,000
  • Year 2: $20,000
  • Year 3: $22,000
  • Year 4: $24,000

Requirements:

1. Calculate the NPV for each project with a discount rate of 8%.
2. Compute the IRR for each project.
3. Calculate the Payback Period and Discounted Payback Period for each project.
4. Assess the Profitability Index (PI) for each project.
5. Provide a decision on which project to invest in if they are mutually exclusive.