Problem:
Please help with the following solution with step by step calculations.
Calculate the net present value and profitability index of an uneven cash flow.
Investment A
Initial Investment is $180,325
Net cash flow
year 1 = $45,000
year 2 = $50,000
year 3 = $82,295
year 4 = $86,400
year 5 = $64,000
Investment B
Initial Investment is $150,960
Net cash flow
year 1 = $35,000
year 2 = $52,000
year 3 = $58,000
year 4 = $75,000
year 5 = $29,000
There is a 10% return on investment. Explain which investment I would like to consider and why.