A.

B.

At Home Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows: & Gard $100,000 $83,000 81,000 98,000 70,000 67,000 47,000 64,000 20,000 40,000 Total $335,000 $335,000 Present value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.7S6 0.694 0.840 0.751 0.712 0.658 0.579 0.792. 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.404 0.327 0.233 0,592 0.424 0.361 0.284 0.194 10 0,558 0,386 0.322 0,247 0.162 Each product requires an investment of $181,000. A rate of 20% has been selected for the net present value analysis. Instructions: 1a. Compute the cash payback period for each project. Cash Payback Period years Home & Garden years 1b. Compute the net present value. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value Home & Garden Music Beat Present value of net cash flow total 21095 19866 Amount to be invested 181,000 181,00 Net present value 29957 17662