Britney Javelin Company is considering two investments, both of which cost $15,000. The cash flows are as follows:

Year	Project M			Project N
1		$8,100			$6,750
2		5,400			4,050
3		4,050			10,800

a1.	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

a-2.

Which of the two projects should be chosen based on the payback method?

	Project M
	Project N
	Both

b-1.	Calculate the NPV for project M and project N. Assume a cost of capital of 7 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