eBook Calculator Print item 1 Cash Payback period, Net Present Value Method, and Analysis for a Service Company Social Cirde Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows: Year Sound Cellar Pro Gamer $65,000 $70,000 2 60,000 55,000 3 25,000 35,000 25,000 30,000 45,000 30,000 Total $220,000 $220,000 4 5 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 69 10% 129 15% 20 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.792 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 5 0.562 0.49% 0.402 0.705 0.564 0.50 0.432 0.335 2 DOS 0.513 6.452 0.376 0.46 0.4404 0.32 0.361 0.24 0.194 10 0.30 0.47 0.10 0.621 Required: 1a. Compute the cash payback period for each product. Cash Payback Period Sound Cellar 2 years Pro Gamer 2 years 1b. Compute the net present value for each product. Use the present value of $1 table above. If required, round to the nearest dollar. Sound Cellar Pro Gamer Total present value of net cash flow X Amount to be invested 125,000 125,000. Net present Value X 2. Because of the timing of the receipt of the net cash flows, the Pro Gamer magazine expansion offers a higher net present value 1. Pored product start with you and accumulate the net cash flows until the amount to be invested is reached Sb. For each produd, muroy the present als factor for each year (Exhibit2 n the text.) by that year's net cash flow. Subtract the amount to be show which product offers the more favorable net persent value de wethoved and the time of my Ow My Wor