Britney Javelin Company is considering two investments, both of which cost $38,000. The cash flows are as follows: Use Appendix B and Appendix D.

Year	Project M			Project N
1		$25,000			$24,000
2		10,000			9,500
3		15,000			20,000

a. Calculate the payback period for project M and project N. (Round the final answers to 2 decimal places.)

	Payback period
Project M	years
Project N	years

b-1. Calculate the NPV for project M and project N. Assume a cost of capital of 8 percent. (Round "PV Factor" to 3 decimal places. Round the intermediate and final answers to the nearest whole dollar.)

	Net present value
Project M	$
Project N	$

b-2. Which of the two projects should be chosen based on the NPV method?

• Project M

• Project N

• Both

c. Should a firm normally have more confidence in answer derived based on NPV method or Payback method?

• NPV method

• Pay back method