GHI Technologies Investment Options

• GHI Technologies is considering two investment opportunities.
• Year 0: Project I: -250,000, Project J: -250,000
• Year 1: Project I: 90,000, Project J: 40,000
• Year 2: Project I: 80,000, Project J: 60,000
• Year 3: Project I: 70,000, Project J: 80,000
• Year 4: Project I: 60,000, Project J: 100,000
• Cost of capital: 7%
• Requirements:
  1. Calculate the NPV for both projects.
  2. Calculate the IRR for both projects.
  3. Assess the profitability index for each project.
  4. Decide which project to undertake based on NPV, IRR, and profitability index.