Zeta Co. is evaluating two projects for expansion:

• Project M: Initial outlay: $12,000, Life: 4 years, Required return: 9%
• Project N: Initial outlay: $10,000, Life: 3 years, Required return: 10%
• Cash flows:
  • Project M: Year 1: $3,500, Year 2: $3,500, Year 3: $3,500, Year 4: $3,500
  • Project N: Year 1: $4,000, Year 2: $3,500, Year 3: $3,000
• Requirements:

1. Determine the NPV for each project.
2. Determine the Profitability Index for each project.
3. Calculate the Payback Period for each project.
4. Decide which project is preferable based on NPV and PI.