You are evaluating two investment options for Delta Inc., Projects U and V. Both projects need an initial investment of $175,000, and the cost of capital is 11 percent. The expected cash flows are as follows:

Expected Net Cash Flows

Year	Project U	Project V
0	($175,000)	($175,000)
1	85,000	80,000
2	70,000	65,000
3	50,000	45,000
4	40,000	30,000

i) Calculate the payback period for each project.
 ii) Compute the NPV and IRR for both projects.
 iii) Advise which project should be selected if they are independent.
 iv) Identify the preferred project if they are mutually exclusive.
 v) Discuss how changes in the cost of capital to 9 percent would affect your recommendations.