You are a financial analyst at the Humongous Project Company (HPC). HPCs weighted-average-cost-of-capital is 12 percent, and it uses a 4-year rule for payback analysis.

Internal teams at HPC are proposing three different projects with the following projected cash flows:

Year	Project Alpha	Project Beta	Project Delta
0	($110,000)	($128,000)	($100,000)
1	41,000	29,000	27,500
2	33,000	29,000	27,500
3	30,000	29,000	27,500
4	24,000	40,000	27,500
5	20,000	60,000	27,500

e. Calculate the Profitability Index (PI) for each project.

f. Assume that these projects are independent projects. Evaluate the acceptability of each project using the payback period, NPV, PI, and IRR methods.

g. Now assume that these projects are mutually exclusive. Rank the projects according to the payback period, NPV, and IRR methods.

h. Do the rankings conflict? If so, which project would you recommend, and why?