A business must choose between two projects, Project K and Project L, with a budget of $180,000. The anticipated cash flows are:

Project K:

• Year 1: $45,000
• Year 2: $45,000
• Year 3: $45,000
• Year 4: $45,000
• Year 5: $45,000

Project L:

• Year 1: $20,000
• Year 2: $30,000
• Year 3: $40,000
• Year 4: $50,000
• Year 5: $60,000

The discount rate is 13%.

Required:

1. For each project, compute the:
   • Payback period
   • Discounted payback period
   • Net present value
   • Internal rate of return
   • Profitability index

Provide a recommendation on which project to invest in based on the analysis.