Company Z is considering two projects:

• Project K: Initial Investment $200,000, Cash Inflows: Year 1 - $80,000, Year 2 - $90,000, Year 3 - $100,000.
• Project L: Initial Investment $180,000, Cash Inflows: Year 1 - $60,000, Year 2 - $70,000, Year 3 - $80,000.

Requirements:

1. Calculate the payback period for each project.
2. Determine the net present value (NPV) of each project at a discount rate of 10%.
3. Calculate the internal rate of return (IRR) for each project.
4. Calculate the profitability index (PI) for each project.
5. Provide a recommendation on which project to undertake and why.