A company has $330,000 to invest in either Project M or Project N. The cash flows are as follows:

• Year 1:
  • Project M: $85,000
  • Project N: $35,000
• Year 2:
  • Project M: $85,000
  • Project N: $55,000
• Year 3:
  • Project M: $85,000
  • Project N: $115,000
• Year 4:
  • Project M: $85,000
  • Project N: $160,000
• Year 5:
  • Project M: $85,000
  • Project N: $85,000

The discount rate is 9%.

Required:

1. For each project, calculate the:
   • Simple payback period
   • Discounted payback period
   • Net present value
2. Prepare a projected balance sheet for the selected project at the end of Year 5.
3. Recommend which project the company should select based on the results of your calculations.