Delta Inc. is considering two projects with the following net cash flows. The company’s required rate of return on investments is 10%. (PV of $1, PV of Annuity of $1, PVA of $1, and FVA of $1)

Year	Project Alpha	Project Beta
0	$(200,000)	$(180,000)
1	$40,000	$35,000
2	$50,000	$45,000
3	$60,000	$55,000
4	$70,000	$65,000
5	$80,000	$75,000

a. Calculate the payback period for each project. Based on the payback period, which project is preferred?

b. Calculate the net present value for each project. Based on the net present value, which project is preferred?