Two projects, P and Q, have the following cash flows:

Year	Project P	Project Q
0	$(1,000)	$(1,000)
1	$400	$500
2	$500	$300
3	$600	$400

The cost of capital is 8%.

1. Calculate the NPV for both projects.
2. Determine the payback period for each project.
3. Assess the profitability index for both projects.
4. Recommend which project should be accepted based on NPV, payback period, and profitability index.