Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: Year 1 2 3 Year 1 2 4 5 Total Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis. Present Value of $1 at Compound Interest 6% 10% 15% 20% 0.943 0.870 0.833 0.890 0.756 0.694 0.840 0.658 0.579 0.792 0.482 0.747 0.402 0.705 0.335 0.665 0.279 555 AWN 3 4 6 Plant Expansion $450,000 450,000 340,000 280,000 180,000 $1,700,000 7 0.909 0.826 0.751 0.683 0.621 0.564 0.513 12% Retall Store 0.893 0.797 0.712 0.636 0.567 0.507 0.452 Expansion $500,000 400,000 350,000 250,000 200,000 $1,700,000 0.572 0.497 0.432 0.376 Year 1 2 3 4 5 6 7 8 9 10 Present Value of $1 at Compound Interest 6% 10% 0.943 0.890 Required: 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 12% 0.909 0.893 0.826 0.797 0.751 0.712 0.683 0.636 0.621 0.567 0.564 0.507 0.513 0.452 0.467 0.404 0.327 0.424 0.361 0.284 0.386 0.322 0.247 Plant Expansion Retail Store Expansion 15% 1a. Compute the cash payback period for each project. Cash Payback Period 2 years 2 years 0.870 0.756 0.658 0.579 0.572 0.482 0.497 0.402 0.432 0.335 0.376 0.279 0.233 0.194 0.162 20% 0.833 0.694 1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar. Plant Expansion Retall Store Expansion 9 10 Required: 0.592 0.424 0.361 0.558 0.386 0.322 1a. Compute the cash payback period for each project. Cash Payback Period 2 years 2 years Plant Expansion Retail Store Expansion Total present value of net cash flow Less amount to be invested 0.284 0.247 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 Feedback 0.194 0.162 Check My Work 1,326,460 X 900,000 Net present value 2. Because of the timing of the receipt of the net cash flows, the retail store expansion 406,460 X 1,343,953 X 900,000 444,953 X Voffers a higher net present value V.