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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
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
$ $
Total $ $
Each project requires an investment of $ A rate of has been selected for the net present value analysis.
Present Value of $ at Compound Interest
Year
Required:
a Compute the cash payback period for each project.
Project Cash Payback Period
Plant Expansion
Retail Store Expansion
b Compute the net present value. Use the present value of $ table above. If required, round to the nearest dollar.
Line Item Description Plant Expansion Retail Store Expansion
Total present value of net cash flow $fill in the blank $fill in the blank
Less amount to be invested fill in the blank fill in the blank
Net present value $fill in the blank $fill in the blank
Because of the timing of the receipt of the net cash flows, the
offers a higher
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