7. Cash Payback Period

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 1 $163,000 $136,000 2 133,000 160,000 3 115,000 110,000 4 104,000 77,000 5 33,000 65,000 Total $548,000 $548,000 Year Each project requires an investment of $296,000. A rate of 20% has been selected for the net present value analysis Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.792 0.256 0.694 3 0.840 0.751 0.712 0.658 6.579 0.792 0.683 0.636 0.572 0:482 Year 6% 10% 12% 15% 2096 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.712 0.658 0.579 0.751 0.683 4 0.792 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 0 0.564 0.507 0.432 0.335 0.705 0.665 7 0.513 0.376 0.452 0.404 0.279 0.233 8 0.627 0.467 0.327 9 0.592 0.424 0.361 0.284 0.194 0.162 10 0.558 0.386 0.322 0.247