Exercise 11-9 (Algo) Payback period; net present value; unequal cash flows LO P1, P3 Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10%. (PV of $1. EV of $1. PVA of $1. and EVA of S1) (Use appropriate factor(s) from the tables provided.) Year Initial investment 1. 2. 3. Net Cash Flows Project 1 $(38,000) 9,500 25,400 15,500 Project 2 $(82,000) 35,000 20,000 36,000 a. Compute payback period for each project. Based on payback period, which project is preferred? b. Compute net present value for each project. Based on net present value, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute payback period for each project. Based on payback period, which project is preferred? (Cumulative net cash outflows must be entered with a minus sign. Do not round your intermediate calculations. Round your Payback Perlod answer to 2 decimal places.) Prev Next Required A Required B Compute payback period for each project. Based on payback period, which project is preferred? (Cumulative net cash outflows must be entered with a minus sign. Do not round your intermediate calculations. Round your Payback Period answer to 2 decimal places.) Project 1 Project 2 Year Cumulative Net Cash Flows Cumulative Net Cash Flows Net Cash Flows Net Cash Flows Initial investment $ (38,000) $ (38,000) $ (82,000) $ (82.000) Year 1 9,500 35,000 Year 2 25,400 20,000 Year 3 15,500 36.000 Payback period Project 1 Payback period years Project 2 Payback period years Based on payback period, which project is preferred? Required B > Prev 1 of 1 NAY Required A Required B Compute net present value for each project. Based on net present value, which project is preferred? (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Project 1 Year 1 Year 2 Year 31 Totals Initial investment Net present value Project 2 Year 1 Year 2 Year 3 Totals Initial investment Net present value Net Cash Flows Present Value Factor Present Value of Net Cash Flows $ 0 $ $ S 0 $ Based on net present value, which project is preferred? $ 10 Prev Next L