LMN Corporation is considering two exclusive projects. The cost of capital is 10% and the tax rate is 30%. The project details are:

Project 1:

• Cost: $1,000,000
• Expected Life: 8 years
• Annual Income before Depreciation & Tax: $210,000
• Depreciation: Straight line basis

Project 2:

• Cost: $1,500,000
• Expected Life: 6 years
• Annual Income before Depreciation & Tax: $320,000
• Depreciation: Straight line basis

Requirements:

1. Calculate the payback period.
2. Calculate NPV.
3. Calculate IRR.
4. Determine which project is better.