Pattison Inc is considering two mutually exclusive projects that differ greatly on the required investment and projected cashflows. The initial investment and the projected after-tax cashflows are shown below:

Year	Project One	Project Two
0	$ (250,000)	$ (25,000)
1	18,000	15,000
2	16,000	8,000
3	18,000	6,000
4	30,000	6,000
5	250,000	500

Pattison Inc has a cost of capital of 6%. The IRR of Project One is 6.67 % while the IRR of Project Two is 19.04%.

a) Determine which project you would choose by applying each of the following decision criteria separately. Explain your reasoning in each case and show your work. (17 marks)

(i) Payback Period (5 marks)

(ii) Discounted Payback Period (5 Marks)

(iii) NPV (3 marks)

(iv) IRR (1 mark)

(v) Profitability Index (3 marks)

b) Which project would you eventually choose? Explain your answer. (1 mark)