The initial investment and cash flows for two mutually exclusive projects are given in Table 1:

Table 1: Project Details

Year	Project C ($)	Project D ($)
0	-5,000	-8,000
1	+2,500	+1,500
2	+2,000	+2,500
3	+500	+3,000
4	+750	+1,000
5	+600	+750

Assuming cost of capital at 12%.

1. Calculate the payback period for the two projects
2. Calculate the net present value for the two projects
3. Which project would you select and why? (Discuss)