Social Circle Publications Inc. is considering two new magazine products. The estimate net cash flows from each

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Social Circle Publications Inc. is considering two new magazine products. The estimate net cash flows from each product are as follows:

Each product requires an investment of $125,000. A rate of 10% 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).

2. Prepare a brief report advising management on the relative merits of each of the two products.

Exhibit 2:

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Accounting

ISBN: 978-1285743615

26th edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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Question Posted: Jun 06, 2023 09:35 AM

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Social Circle Publications Inc. is considering two new magazine products. The estimate net cash flows from each

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