JKL Ltd. has two investment projects under consideration with the following data:

• Project 1:

• Initial Investment: $250,000
• Cost of Capital: 8%
• Cash Inflows:
  • Year 1: $80,000
  • Year 2: $90,000
  • Year 3: $100,000
  • Year 4: $110,000

• Project 2:

• Initial Investment: $270,000
• Cost of Capital: 9%
• Cash Inflows:
  • Year 1: $90,000
  • Year 2: $100,000
  • Year 3: $110,000
  • Year 4: $120,000

Requirements:

1. Compute the payback period for each project.
2. Calculate the NPV for each project.
3. Determine the PI for each project.
4. Provide a recommendation on which project to proceed with and justify your decision.