Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below.

Project Soup Project Nuts

Initial Investment $600,000 $900,000

Annual Net Income $30,000 $63,000

Annual Cash Inflow $150,000 $213,000

Salvage Value $0 $0

Estimated Useful Life 5 years 6 years

The company requires a 10% rate of return on all new investments.

Part (a): Calculate the payback period for each project.

Part (b): Calculate the net present value for each project.

Part (c): Which project should Carr Company accept and why?