HealthGen is analyzing two projects with the following net cash flows. The company’s required return is 7%. (PV of $1 = 0.935, PVIFA of $1 = 4.100, FV of $1 = 1.070, FVA of $1 = 4.845)

Year	Project M Cash Flow	Project N Cash Flow
0	$(1,100,000)	$(900,000)
1	$280,000	$230,000
2	$330,000	$270,000
3	$380,000	$310,000
4	$430,000	$350,000
5	$480,000	$390,000

a. Calculate the payback period for each project. Which project should be chosen based on the payback period?
 b. Calculate the net present value for each project. Which project should be chosen based on the net present value?