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,$ FV of $$1,$ PVA of $$1,$ and FVA of $$1)($Use appropriate factor$($s$)$ from the tables provided.$)$

Year Net Cash Flows

Project $1$ Project $2$

Initial investment $$(60,000)$ $$(59,000)$

$1.15,00035,000$

$2.30,20020,000$

$3.18,50020,000$

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?Exercise $24-9($Algo$)$ Payback period; net present value; unequal cash flows LO P$1,$ P$3$

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 $$1,$ FV of $$1,$ PVA of $$1,$ and FVA of $$1)($Use appropriate factor$($s$)$ from the tables provided.$)$

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.

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.$)12$

Exercise $24-9($Algo$)$ Payback period; net present value; unequal cash flows LO P$1,$ P$3$

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 $$1,$ FV of $$1,$ PVA of $$1,$ and FVA of $$1)($Use appropriate factor$($s$)$ from the tables provided.$)$

$1\mathrm{.}25$

points

$03$:$18$:$27$

$\backslash$table$[[$Year$,$Net Cash Flows$],[$Project $1,$Project $2],[$Initial investment,$$(60,000),$$$(59,000)],[1.,15,000,35,000],[2.,30,200,20,000],[3.,18,500,20,000]]$

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.

References

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.$)$

$\backslash$table$[[,\backslash$table$[[$Net Cash$],[$Flows$]],\backslash$table$[[$Present Value$],[$Factor$]],\backslash$table$[[$Present Value of Net$],[$Cash Flows$]]],[$Project $1],[$Year $1,,0\mathrm{.}9091,],[$Year $2,,0\mathrm{.}8264,],[$Year $3,,0\mathrm{.}7513,],[$Totals$,$$$,,$$$],[$Initial investment$],[$Net present value,,,$$],[$Project $2],[$Year $1],[$Year $2],[$Year $3],[$Totals$,$$$,,$$$],[$Initial investment$],[$Net present value,,,$$],[$Based on net present value, which project is preferred?,$]]$