Zair Electronics can make either of two investments at time 0. Assuming a required rate of return of 14%, determine for each project (a) the payback period, (b) the net present value, (c) the profitability index, and (d) the internal rate of return. Assume under MACRS the asset falls in the five-year property class and that the corporate marginal tax rate is 34%. The initial investments required and yearly savings(EBIT) excluding depreciation and taxes are shown below:

Assume that there is no difference in the level of net working capital for both of projects and no salvage

value at the end of useful life. You have to calculate net cash flows that fill the blanks in the template provided below first.

Make sure to show all of your work!