At Home Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows:

Each product requires an investment of $270,000. A rate of 10% has been selected for the net present value analysis. Instructions1. 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.2. Prepare a brief report advising management on the relative merits of each of the twoproducts.

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Year Home & Garden Music Beat $150,000 120,000 105,000 84,000 41,000 $500,000 $125,000 145,000 100,000 70,000 60,000 Total $500,000 2345