Cash Payback Period, Net Present Value Method, and Analysis Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows: Year 1 Sound Cellar $ 65,000 60,000 Pro Gamer $ 70,000 55,000 2 3 25,000 35,000 4 25,000 30,000 5 45,000 30,000 Total $220,000 $220,000 Each product requires an investment of $125,000. A rate of 10% has been selected for the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 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 8 0.627 0.467 0.404 0.327 0.233 9 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 product. Cash Payback Period Sound Cellar Pro Gamer 1 year 1b. Compute the net lue. Use the present value of $1 table above. If required, round to the nearest dollar. 2 years Sound Cellar Pro Gamer 3 years Present value of net c btal 4 years $ Less amount to be inv $ $ 5 years Net present value $ 2. Because of the timing of the receipt of the net cash flows, the magazine expansion offers a higher Required: 1a. Compute the cash payback period for each product. Cash Payback Period Sound Cellar Pro Gamer 1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar. Sound Cellar Pro Gamer Present value of net cash flow total Less amount to be invested Sound Cellar Net present value Pro Gamer net present value net cash flow 2. Because of the timing of the receipt of the net cash flows, the magazine expansion offers a higher