###Question 6###

JKL Enterprises is analyzing two projects, Project M and Project N. The expected net cash flows for each project over three years are as follows:

Projected Net Cash Flows (in thousands of dollars)

Year 0:

• Project M: $(180)$
• Project N: $(220)$

Year 1:

• Project M: $70$
• Project N: $80$

Year 2:

• Project M: $80$
• Project N: $90$

Year 3:

• Project M: $90$
• Project N: $110$

Requirements:

1. Calculate the Net Present Value (NPV) for each project using a discount rate of $10%$.
2. Determine the Internal Rate of Return (IRR) for each project.
3. Compute the payback period for each project.
4. Analyze the profitability index (PI) for each project.
5. Recommend which project should be chosen based on the results of your analysis.