Integrative Case 5

A corporation is considering two projects, Project M and Project N, with the following expected cash flows.

Expected Cash Flows:

Year	Project M	Project N
0	($300)	($400)
1	$90	$120
2	$100	$140
3	$120	$170
4	$140	$200

Requirements:

1. Determine the Payback Period for each project.
2. Calculate the Discounted Payback Period with a discount rate of 10%.
3. Compute the Net Present Value (NPV) for both projects using a 10% discount rate.
4. Find the Internal Rate of Return (IRR) for both projects.
5. Decide which project should be undertaken based on NPV and IRR.