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) (Use appropriate factor(s) from the tables provided.) Net Cash Year Project 1 Flows Project 2 Initial investment $ (60,000) $ (60,000) 1. 30,000 35,000 2. 3. 30,000 5,000 20,000 20,000 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? (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Net Cash Flows Present Value Factor Present Value of Net Cash Flows Project 1 Year 1 Year 2
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) (Use appropriate factor(s) from the tables provided.) Net Cash Year Project 1 Flows Project 2 Initial investment $ (60,000) $ (60,000) 1. 30,000 35,000 2. 3. 30,000 5,000 20,000 20,000 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? (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Net Cash Flows Present Value Factor Present Value of Net Cash Flows Project 1 Year 1 Year 2
Chapter1: Financial Statements And Business Decisions
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