You are a financial analyst working at EcoHomes and you are evaluating the following mutually exclusive projects:

Time Period	Project A Cash Flows	Project B Cash Flows
Cost	-100,000	-200,000
Year 1	30,000	60,000
Year 2	36,000	70,000
Year 3	40,000	76,000
Year 4	45,000	85,000

a) If the estimated cost of capital for these projects is 10% p.a., which project would be selected if the profitability index (PI) method is used? (4 marks)

b) If the estimated cost of capital for these projects is 10% p.a., which project would be selected if the NPV method is used? (4 marks)

c) Comment on the results from parts (a) and (b), and make your final decision on which project to undertake. (2marks)