Payback and payback reciprocal Norene Corporation is evaluating two capital projects with the cash flows shown on the following page. The company can adopt only one project. It wants to use a payback analysis to decide which project is preferable. Neither project has any salvage value.

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REQUIRED a. Compute the payback period on each project. b. Discuss which project is preferable. c. Compute the payback reciprocal on each project and discuss the reliability of the estimate.