Investment Options (in $):

• Option 1: Initial Investment: $25,000

• Year 1: $5,000
• Year 2: $10,000
• Year 3: $12,000
• Year 4: $8,000

• Option 2: Initial Investment: $30,000

• Year 1: $6,000
• Year 2: $9,000
• Year 3: $10,000
• Year 4: $12,000

Required:

1. Determine the payback period for each investment.
2. If the required payback period is 2.5 years, which investment will you choose?
3. Calculate the internal rate of return (IRR) for each investment.
4. Compute the net present value (NPV) at a discount rate of 10%.
5. Assess the modified internal rate of return (MIRR) for both investments assuming a finance rate of 10% and a reinvestment rate of 12%.