help Kiki to assess the two investment options by calculating the pay back period and Net Present value of each option check your work on part 4.1 to make sure you are using the correct estimated annual cash flows

commericial Kitchen cost of investment is 75000

licening cost of investment is 15000

this the part 4.1

Direct materials 1.24 Direct labor 1.50 Product Cost 2.74 Variable selling expense 0.16 Total Variable Costs 2.90 Contribution 1.10 Incremental cost Direct materials 1.25 $40/40+ $10/40 Direct labor 0.75 $30/40 2 Incremental Benefit of processing further Incremental Revenue 200.00 $5*200 - $200 + Incremental Cost: 5 DM 250.00 16 DL 150.00 7 Var OH Fixed OH 9 Var Selling 8.00 Incremental Costs 408.00 1 Incremental Benefit of processing further (208.00) 8 10 2 Case Study Part 4.1 Investment Option #1: Commercial Kitchen Cash Flows Unflavored Strawberry Revenue 17,500.00 67,500.00 Product Cost 13,700.00 56,850.00 3,800.00 10,650.00 Total CM 14,450.00 Rent 2,000.00 Insurance 200.00 Permit and Inspection 125.00 Cash Flows 12,125.00 Investment Option #2: License Agreement Cash Flows Royalties from Unflavored 7,000.00 5,000 x 4x.35 Royalties from Strawberry 26,250.00 15,000 x 5x.35 Cash Flow 33,250.00 Royalty Rate 35.00% Direct materials 1.24 Direct labor 1.50 Product Cost 2.74 Variable selling expense 0.16 Total Variable Costs 2.90 Contribution 1.10 Incremental cost Direct materials 1.25 $40/40+ $10/40 Direct labor 0.75 $30/40 2 Incremental Benefit of processing further Incremental Revenue 200.00 $5*200 - $200 + Incremental Cost: 5 DM 250.00 16 DL 150.00 7 Var OH Fixed OH 9 Var Selling 8.00 Incremental Costs 408.00 1 Incremental Benefit of processing further (208.00) 8 10 2 Case Study Part 4.1 Investment Option #1: Commercial Kitchen Cash Flows Unflavored Strawberry Revenue 17,500.00 67,500.00 Product Cost 13,700.00 56,850.00 3,800.00 10,650.00 Total CM 14,450.00 Rent 2,000.00 Insurance 200.00 Permit and Inspection 125.00 Cash Flows 12,125.00 Investment Option #2: License Agreement Cash Flows Royalties from Unflavored 7,000.00 5,000 x 4x.35 Royalties from Strawberry 26,250.00 15,000 x 5x.35 Cash Flow 33,250.00 Royalty Rate 35.00%