Investment Decision Company ABC is considering two investments, P and Q. Investment P requires $800 and provides cash inflows of $400 each year for 3 years. Investment Q requires $800 and provides cash inflows of $500, $300, and $200 over the next 3 years.

Requirements:

1. Compute the NPV for both investments at discount rates of 4%, 8%, and 16%.
2. Identify which investment should be chosen if the cost of capital is 8%.
3. Generate the NPV profiles for both investments.
4. Determine the crossover rate for the investments.