The expected cash flows of two projects are shown in the template. The appropriate discount rate is 9%.

1. Compute the Discounted Payback Period of each project. If the projects are mutually exclusive, which project(s) would be accepted if the firm bases its decision solely on discounted payback period? Assume that managements maximum acceptable discounted payback period is 7 years.
2. If the projects are independent, which project(s) would be chosen if the firm bases its decision solely on profitability index?

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