The Canary Company is looking to invest in a new project. They have narrowed it down to two potential projects - A and B.  The data on investment and cash flows for each project is outlined below:

Project    Initial Investment    Year One    Year Two    Year Three    Year Four
Project A    $450,000    $200,000    $225,000    $275,000    $200,000
Project B    $500,000    $150,000    $200,000    $300,000    $250,000

The appropriate discount rate for each project is 16%.  With this information, determine the following information:

•    NPV of cash flows for each project
•    Profitability index for each project

Required:

Based on your calculations, which project do you select and why?