In facing competition, Apple Inc. is debating whether to enter the TV business by launch a new product called AppleGlass, or to introduce a smart home control system called iHome, or a fitness center called iFit. The projected investment and cash flows for the three proposed projects are:

Year	0	1	2	3	4	5
Apple glass	(35)	20	20	15	15	15
Ihome	(75)	25	25	35	35	35
IFit	(50)	10	10	27	27	27

(a) Among AppleGlass and iHome, which project should Apple choose if the discount rate is 8%? Now, which project should Apple choose if the discount rate were 13% instead, and why? (b) Find the IRR for AppleGlass and iHome using trial-and-error method. Is there any reason to believe that the project with the higher IRR is the better project? (c) What is the pure payback period for the first two projects? Is there any reason to believe that the project with shorter payback is the better project? (d) Compute the profitability indexes for each project at a 8% discount rate. Suppose Apple has a $110 million investment budget. The projects are not divisible. Which project(s) should be taken?