ABC Inc. is considering two projects, Project X and Project Y. Both projects have the following details:

• Project X:

• Initial Investment: $180,000
• Cost of Capital: 8%
• Cash Inflows:
  • Year 1: $60,000
  • Year 2: $70,000
  • Year 3: $80,000
  • Year 4: $50,000

• Project Y:

• Initial Investment: $200,000
• Cost of Capital: 9%
• Cash Inflows:
  • Year 1: $70,000
  • Year 2: $80,000
  • Year 3: $90,000
  • Year 4: $60,000

Requirements:

1. Calculate the payback period for each project.
2. Compute the NPV for each project.
3. Determine the PI for each project.
4. Provide a recommendation on which project to choose based on the calculated figures and justify your decision.