Gonzalez Company is considering two new projects with the following net cash flows. The companys 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 flow

Project 1 1. 11,000 2. 31,800 3. 20,000

Project 2 1. 35,000 2. 20,000 3. 28,000

Initial investment project 1. $(44,000) project 2 $ (76,000)

a.Compute the payback period for each project. Based on the payback period, which project is preferred?

b. Compute the net present value for each project. Based on net present value, which project is preferred?