You have two exclusive projects 1 and 2 with a duration of 5 years. The information relating to the two projects is as follows: Initial investment: Project (1): $ 900,000 Project (2): $ 1,100,000 ($ 900,000 for assets and $ 200,000 for transport equipment). The net tax flows (including tax savings) associated with the two projects are as follows: Discount rate for flows associated with the two projects: 10% Resale at the end of the project (beginning of the 6th year): Project (1) 60% of the initial investment; Project (2): 60% of the value of the assets and 5% of that of the transport equipment.

Years	1	2	3	4	5
Project 1	370 000	370 000	370 000	470 000	470 000
Project 2	330 000	330 000	530 000	530 000	530 000

Questions A. What is the payback time for each project? If the target payback time is 2 years, what project should we invest in? B. What is the NPV of each of the two projects? According to this criterion, in which project should we invest?