Cash Payback period, 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 $147,000 $123,000 2 121,000 145,000 3 104,000 99,000 4 94,000 69,000 30,000 60,000 Total 5496,000 $496,000 Each project requires an investment of $200,000. A rate of 12% has been selected for the net present value analysis Present Value of $1 at Compound Interest Year 10 129 159 20W 1 0.945 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.570 4 0.792 0.663 0.636 0.572 0.482 S 0.747 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 0.627 0.467 0.404 0.322 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Previous Check My Work 1 more Check My Work uses remaining Cand Submit Assement for Grading eBook Pem 9 0.592 0.424 0.361 0.284 0.194 0.162 10 0.558 0.386 0.322 0.247 Required: 1a, Compute the cash payback period for each project Cash Payback Period Plant Expansion 2 years Retail Store Expansion 2 years 1h. 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 268,000 X Less amount to be invested 378,550 X 373,796 X Net present value 110,550 105,796 2. Because of the timing of the receipt of the net cash flows, the plant expansion offers a higher net present value Feedback Check My Word 1a. For each project, start with year 1 and accumulate the net cash flows until the amount to be invested is reached 1b. For each project, multiply the present value factor for each year (Refer to Exhibit 2 in the text) by that year's net cash flow. Subtract the amount to be Invested from the total present value of the net cash flow. Which project offers the more favorable net present value? 2. Consider when cash flows are received and the time value of money