Return on Investment Analysis Project Omicron:

• Initial Investment: $100,000
• Cash Flows:
  • Year 1: $30,000
  • Year 2: $35,000
  • Year 3: $40,000
  • Year 4: $45,000

Project Pi:

• Initial Investment: $110,000
• Cash Flows:
  • Year 1: $25,000
  • Year 2: $30,000
  • Year 3: $35,000
  • Year 4: $50,000

Requirements:

1. Calculate the NPV for each project using a discount rate of 10%.
2. Compute the IRR for each project.
3. Determine the Payback Period and Discounted Payback Period for each project.
4. Assess the Profitability Index (PI) for each project.
5. Decide which project to invest in if they are independent.