4 Daryl Kearns saved $220,000 during the 25 years that he worked for a major corporation Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by Investing his savings wisely and is currently considering two investment opportunities. Both Investments require an initial payment of $191,500 The folowing table presents the estimated cash inflows for the two alternatives: Year Year 2 Year Year Opportunity $ 55,630 5.58,630 178,750 0101,400 Opportunity #2 104,000 109.600 17,800 15,200 01224 BOOK Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate: It les 10 percent. (PV.QuS1 and PVA of $1 (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? b. Compute the payback period for each project. Which should Mr. Kearns adopt based on the payback approach? Pri Complete this question by entering your answers in the tabs below, Required A Required Compute the net present value of each opportunity, which should Mr Kearns adopt based on the net present value approach? (Round your intermediate calculations and nnal answer to two decimal places) Net Present Value Opportunity Opportunity 2 Which opportunity should be the Required 7 Daryl Kearns saved $220,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $191,500. The following table presents the estimated cash inflows for the two alternatives: 013232 Opportunity opportunity 2 Year 1 55,630 104,000 Year 2 550,830 109,600 Year 3 $78,750 17,800 Year 5101,400 15,200 Book Print Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate it is 10 percent. (PV of $1 and PVA of $:1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Me Kearns adopt based on the net present value approach? b. Compute the payback perlod for each project. Which should Mr. Kearns adopt based on the payback approach? Complete this question by entering your answers in the tabs below ferences Required Required Compute the payback period for each opportunity. Which should Mr. Kears adopt based on the payback approach Opportunity 1 Opportunity 2 Which opportunity should be chosen? Payback Period years years