Gamma Enterprises is considering two potential investments with the following net cash flows. The company’s required rate of return on investments is 14%. (PV of $1, PV of Annuity of $1, PVA of $1, and FVA of $1)

Year	Project C	Project D
0	$(140,000)	$(150,000)
1	$35,000	$40,000
2	$45,000	$50,000
3	$55,000	$60,000
4	$65,000	$70,000
5	$75,000	$80,000

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

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