Cash Payback Penod, 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 $156,000 $131,000 2 128,000 153,000 3 110,000 105,000 4 100,000 74,000 5 31,000 62,000 Total 5525,000 $525,000 129 Each project requires an investment of $284,000. A rate of 15% has been selected for the net present value analysis Present Value of $1 at Compound Interest Year 6% 10% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.297 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0,56 0.497 0.402 0.705 0.564 0.507 0.432 0.335 M 16 0279 Each project requires an investment of $284,000. A rate of 15% has been selected for the net present value analysis, Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.826 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 3 0.742 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 B 0.62% 0,46% 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 Required: 1a. Compute the cash payback period for each project. Cash Payback Period Plant Expansion 2 years Retail Store Expansion 2 years 1b. Compute the present value. Use the present value of $1 table above If required, round to the nearest dollar. la. Compute the cash payback period for each project. Cash Payback Period Plant Expansion 2 years Retail Store Expansion 2 years 1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar. Plant Expansion Retail Store Expansion Total present value of net cash flow Les amount to be invested Net pretient value 2. Because of the timing of the receipt of the net cash flows, the plant expansion offers a higher net prenent value