You are a financial analyst for the Himalayan Mining Company. The director of capital budgeting has asked you to analyze two proposed capital investments Project R and Project S. The initial investments in the two projects are Rs. 300, 000 and Rs. 400, 000 respectively. The yearly inflow of Project R is Rs. 80, 000 for 5 years. Project Ss yearly inflows for 5 years are Rs. 150, 000; Rs. 120, 000; Rs. 100, 000; Rs. 90, 000; and Rs. 80, 000 respectively.

Instructions: Calculate each projects discounted payback period, net present value (NPV), and profitability index (PI), and also recommend that which project should be accepted?