1 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: Year Plant Expansion Retail Store Expansion $140,000 $117,000 115,000 138,000 99,000 94,000 90,000 66,000 28,000 57,000 Total $472,000 $472,000 2 3 4 5 K 3 Each project requires an investment of $255,000. A rate of 10% has been selected for the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 5 6 0.507 Required: 0.247 0.162 10. Compute the cash payback period for each project Cash Payback Period Plant Expansion Retail Store Expansion 1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar, Plant Expansion Retail Store Expansion Present value of net cash flow total Les amount to be invested Net present value 2. Because of the timing of the receipt of the net cash flows, the offers a higher Check My Work