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AquaPure Water Technologies is considering two water purification projects. The companys required rate of return is 10%. Use appropriate factors from the tables provided. Project
AquaPure Water Technologies is considering two water purification projects. The company’s required rate of return is 10%. Use appropriate factors from the tables provided.
- Project Aqua1: Initial Investment: $250,000; Year 1: $80,000; Year 2: $90,000; Year 3: $100,000; Year 4: $50,000
- Project Aqua2: Initial Investment: $300,000; Year 1: $90,000; Year 2: $100,000; Year 3: $110,000; Year 4: $60,000
- a. Determine the payback period for each project. Based on the payback period, which project is preferred?
- b. Determine the net present value for each project. Based on the net present value, which project is preferred?
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