ABC Corporation is evaluating two projects, Project A and Project B. The following information is available:

	Project A	Project B
Cost of Capital	10%	9%
Initial Investment	$200,000	$250,000
Cash Inflow Year 1	$60,000	$70,000
Cash Inflow Year 2	$80,000	$90,000
Cash Inflow Year 3	$100,000	$110,000

Requirements:

1. Calculate the payback period for each project.
2. Determine the net present value (NPV) of each project.
3. Compute the internal rate of return (IRR) for each project.
4. Evaluate the profitability index of each project.
5. Recommend which project should be selected and justify your choice.