PR 26-2A Cash payback period, net present value method, and analysis Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: OBJ. 2, 3 Plant Expansion $ 450,000 Year Retail Store Expansion $ 500,000 400,000 1 2 450,000 3 340,000 350,000 4 280,000 250,000 180,000 200,000 Total $1,700,000 $1,700,000 Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis. Instructions 1. Compute the following for each product: a. Cash payback period. b. The net present value. Use the present value of $1 table appearing in this chapter (Exhibit 2)
PR 26-2A Cash payback period, net present value method, and analysis Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: OBJ. 2, 3 Plant Expansion $ 450,000 Year Retail Store Expansion $ 500,000 400,000 1 2 450,000 3 340,000 350,000 4 280,000 250,000 180,000 200,000 Total $1,700,000 $1,700,000 Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis. Instructions 1. Compute the following for each product: a. Cash payback period. b. The net present value. Use the present value of $1 table appearing in this chapter (Exhibit 2)
Chapter1: Financial Statements And Business Decisions
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