XYZ Company is evaluating two potential investment opportunities, Project 1 and Project 2. Project 1 requires an initial investment of $1,000,000 and generates cash inflows of $200,000 in Year 1, $300,000 in Year 2, $400,000 in Year 3, and $500,000 in Year 4. Project 2 requires an initial investment of $1,500,000 and generates cash inflows of $300,000 in Year 1, $400,000 in Year 2, $500,000 in Year 3, and $600,000 in Year 4. The company's required rate of return is 10%. Which project should XYZ Company invest in based on the profitability index (PI) method?

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