Odyssey Ventures is considering two new projects with different initial investments and cash flows. The required rate of return is 19%.

Project Alpha:

• Initial Investment: $(280,000)
• Year 1: $90,000
• Year 2: $95,000
• Year 3: $100,000
• Year 4: $110,000

Project Beta:

• Initial Investment: $(300,000)
• Year 1: $85,000
• Year 2: $90,000
• Year 3: $105,000
• Year 4: $120,000

a. Compute the payback period for each project. Based on the payback period, which project is preferred?

b. Compute the net present value (NPV) for each project. Based on NPV, which project is preferred?