A firm is evaluating two capital projects, I and J. Project I requires an initial outlay of $2,000 and returns $1,200 in the first year and $1,500 in the second year. Project J requires $1,800 and returns $1,000, $800, and $1,200 over the next three years.

1. Calculate the NPV of each project at a discount rate of 9%.
2. Determine the payback period for both projects.
3. Assess the impact of varying the discount rate on the NPVs of both projects.

Recommend the project to pursue based on your analysis.