Projects M and N, of equal risk, are alternatives for expanding Rosa Companys capacity. The firms cost of capital is 13%. The cash flows for each project are shown in the followingtable:

Year	Project M	Project N
Initial outlay	R800 000	R800 000
1	R150 000	R150 000
2	R200 000	R350 000
3	R250 000	R300 000
4	R300 000	R150 000
5	R350 000	R50 000

The management of Rosa Company has stated that they would like a payback period of two years, if possible, due to the uncertainty caused by the Covid-19 pandemic on thesetwo projects.

REQUIRED:

Evaluate the two (2) projects Rosa Company is considering using all methods of capital budgetting eveluation payback method, discounted payback, NPV and IRR and recommend, with justification, which project Rosa Company should accept.

Suggested format:

	Project M	Project N
CF 0
CF 1
CF 2
CF 3
CF 4
CF 5
I/YR
IRR/YR
NPV
Payback period
Discounted Payback