Cash Payback period:Elite Apparel Inc

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 $139,000 $167,000 136,000 118,000 164,000 112,000 79,000 67,000 107,000 33,000 Total $561,000 $561,000 Each project requires an investment of $303,000. A rate of 20% has been selected for the net present value analysis. Present Value of $1 at Compolind Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 5 6 0.497 0.432 0.376 0.747 0.705 0.665 0.627 0.592 .558 0.621 0.564 0.513 0.467 0.424 0.386 0.567 0.507 0.452 0.404 0.361 0.322 0.402 0.335 0.279 0.233 0.194 0.162 0.327 0.284 0.247 10 0 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 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 Less amount to be invested 303,000 303,000 Net present value 2. Because of the timing of the receipt of the net cash flows, the offers a higher