### Calculate the net present value and profitability index

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Project ABC has an initial cost of \$1,000 and generates cash inflow of \$2,000 at the end of year 1. Project QRS has an initial cost of \$10,000 and has annual cash inflows of \$4,400, \$4,840, and \$5,324 in year 1-3. Assuming a 10% discount rate, calculate the net present value and profitability index for both projects. Which project is better in terms of NPV? Which project is better in terms of PI?

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