Gator lovers ice cream is a small ice cream manufacture they want to either open a new store (Project A) or buy a new machine to mass produce ice cream to sell to supermarkets (Project B). Calculate the payback period for both products then in 3-5 sentences discuss which project the ice cream store should go with and why?

Project A Project B

Initial investment (48,000) Initial Investment (52,000)

Year operating cash inflows (after taxes) Year Operating cash flows (after taxes)

1- 15,000 1-18,000

2-15,000 2-20,000

3-15,000 3--15,000

4-15,000 4-12,000

5-15,000 5-10,000

total years 1-5- 75,000 total years 1-5- 75,000