Bright Future Pharmaceuticals is evaluating two new drug development projects. The company’s required rate of return is 12%. Use appropriate factors from the tables provided.

• Project Pharma1: Initial Investment: $700,000; Year 1: $250,000; Year 2: $280,000; Year 3: $300,000; Year 4: $150,000
• Project Pharma2: Initial Investment: $750,000; Year 1: $280,000; Year 2: $300,000; Year 3: $320,000; Year 4: $180,000
• a. Determine the payback period for each project. Based on the payback period, which project is preferred?
• b. Determine the net present value for each project. Based on the net present value, which project is preferred?