Suppose your firm is considering two mutually exclusive,required projects with the cash flows shown as follows.The required rate of return on projects of both of their risk class is 10 percent,and the maximum allowable payback and discounted payback statistic for the projects are two and a half and three and a half years,respectively. 
Use the PI decision rule to evaluate these projects; which one(s) should be accepted or rejected?
Definitions:
Capital Account
An account used to track the investments made into a company by its owners, plus the retained earnings of the business.
Withdrawal Account
An account used in partnership accounting to record the amounts drawn out of the business by the partners for personal use.
Relative Ease
The level of simplicity or difficulty with which a task can be completed when compared to other tasks.
Formation
The process of legally creating a company or other organization; involves registration with relevant authorities and may include drafting a constitution or by-laws.
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