Project A costs P60,000 worth of machines, and is expected to generate P18,000 of annual cash revenues and P3,000 of annual cash expenses for the next 5 years.

Project B costs P45,000 worth of equipment, and is expected to generate the following cash inflow for the next 5 years. These projects required return for this kind of investment is 10%.

Year Net Cash Inflow

1 P15,000

2 13,000

3 11,000

4 9,000

5 7,000

You are required to compare the two projects using the following methods.

Compute for the Payback period Project A.

Compute for the Payback period Project B.

Compute for the NPV Project A.

Compute for the NPV Project B.

Compute for the Profitability Index Project A.

Compute for the Profitability Index Project B.