You are the CFO of Motor City Spirits Co. in Detroit. The owner is considering two new products, a Rye or a Bourbon, but can only support one. Both products require some upfront costs and have projected cash flows for 3 years.

Annual cash flows:	Rye	Bourbon
Year 0	$ (906,250)	$ (1,812,500)
Year 1	$ 337,500	$ 1,025,00
Year 2	$ 525,000	$ 812,500
Year 3	$ 475,000	$ 675,000
Discount rate	14%

1. Given that you typically use IRR as your decision criteria, which spirit should you produce?
2. Lastly, you recall your Finance professor really liked using NPV, so you consider NPV for both projects?
3. What is the payback period for these projects.