XYZ Ltd. is considering investing in two projects, Project C and Project D. Project C has an initial cost of $12,000 and Project D costs $14,000 upfront.

Year	Project C	Project D
1	$3,000	$4,000
2	$5,000	$3,000
3	$7,000	$5,000
4	$2,000	$6,000
5	$1,000	$2,000

Requirements:

• Calculate the payback period for each project.
• Compute the NPV using a discount rate of 12%.
• Determine the profitability index (PI) for each project.
• State which project should be accepted based on the PI.