Cash payback period, net present value method, and analysisElite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows:Retail StoreYearPlant ExpansionExpansion1$142,000$119,0002116,000139,0003100,00095,000491,00067,0005Total28,000$477,00057,000$477,000Each project requires an investment of $258,000. A rate of 15% has been selected for the net present value analysis.Present Value of $1 at Compound InterestYear6%10%12%15%20%10.9430.9090.8930.8700.83320.8900.8260.7970.7560.69430.8400.7510.7120.6580.57940.7920.6830.6360.5720.48250.7470.6210.5670.4970.40260.7050.5640.5070.4320.33570.6650.5130.4520.3760.27980.6270.4670.4040.3270.23390.5920.4240.3610.2840.194100.5580.3860.3220.2470.162Required:1a. Compute the cash payback period for each project.Plant ExpansionRetail Store ExpansionCash Payback Period1-6 years1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar.Plant ExpansionRetail Store ExpansionTotal present value of net cash flowLess amount to be investedNet present valueem

Question 1a. Cash Payback period is the amount of time for the initial investment to be recovered…

Answered: Cash payback period, net present value…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2PA

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