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. Year Net Cash Flows Project 1 Project 2 Initial investment $(46,000) $(74,000) 1. 11,500
Gonzalez Company is considering two new projects with the following net
Note: Use appropriate factor(s) from the tables provided.
| Year | Net Cash Flows | |
|---|---|---|
| Project 1 | Project 2 | |
| Initial investment | $(46,000) | $(74,000) |
| 1. | 11,500 | 35,000 |
| 2. | 25,900 | 20,000 |
| 3. | 21,500 | 25,000 |
- Compute payback period for each project. Based on payback period, which project is preferred?
- 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 payback period for each project. Based on payback period, which project is preferred?
Note: Cumulative netcash outflows must be entered with a minus sign. Do not round your intermediate calculations. Round your Payback Period answer to 2 decimal places.Year Project 1 Project 2 Net Cash Flows Cumulative Net Cash Flows Net Cash Flows Cumulative Net Cash Flows Initial investment $(46,000) $(74,000) Year 1 Year 2 0 0 Year 3 0 0 Payback period Project 1 Payback period years Project 2 Payback period years Based on payback period, which project is preferred? 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 Factor Present Value of Net Cash Flows Project 1 Year 1 Year 2 Year 3 Totals $0 $0 Initial investment Net present value $0 Project 2 Year 1 Year 2 Year 3 Totals $0 $0 Initial investment Net present value $0 Based on net present value, which project is preferred?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
