ces Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10 %. (PV of $1, FV of $1. PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Net Cash Flows Year Project 1 Initial investment $(50,000) 1. 2. 10,000 3. 25,300 30,000 Project 2 $(70,000) 35,000 22,000 25,000 a. Compute payback period for each project. Based on payback period, which project is preferred? b. Compute net present value for each project. Based on net present value, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute net present value for each project. Based on net present value, which project is preferred? Note: Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar. Net Cash Flows Present Value Present Value of Net Factor Cash Flows Project 1

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on
investments is 10 %. (PV of $1, FV of $1. PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided.
Net Cash Flows
Year
Project 1
Initial investment
$(50,000)
1.
2.
10,000
3.
25,300
30,000
Project 2
$(70,000)
35,000
22,000
25,000
a. Compute payback period for each project. Based on payback period, which project is preferred?
b. Compute net present value for each project. Based on net present value, which project is preferred?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute net present value for each project. Based on net present value, which project is preferred?
Note: Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.
Net Cash
Flows
Present Value Present Value of Net
Factor
Cash Flows
Project 1
Transcribed Image Text:ces Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10 %. (PV of $1, FV of $1. PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Net Cash Flows Year Project 1 Initial investment $(50,000) 1. 2. 10,000 3. 25,300 30,000 Project 2 $(70,000) 35,000 22,000 25,000 a. Compute payback period for each project. Based on payback period, which project is preferred? b. Compute net present value for each project. Based on net present value, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute net present value for each project. Based on net present value, which project is preferred? Note: Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar. Net Cash Flows Present Value Present Value of Net Factor Cash Flows Project 1
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