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AKP Fashion Designers are considering two investment projects. AKP expects at least 1 2 % rate of return from similar projects. The estimated net cash

AKP Fashion Designers are considering two investment projects. AKP expects at least 12% rate of return from similar projects. The estimated net cash flows from each project are as follows:
Year Project ABC Project CBD
Initial Cash flow ($575,000)($575,000)
1 $120,000 $217,900
2 $137,000 $200,000
3 $153,450 $167,000
4 $209,000 $142,350
5 $227,800 $120,000
Required
1. Calculate Net present value (NPV) and payback period.
2. Recommend the best project based on NPV criteria and explain the reason for your recommendation.

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