Home Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows:

Year	Home & Garden		Music Beat
1	$153,000		$128,000
2	125,000		150,000
3	108,000		103,000
4	98,000		72,000
5	30,000		61,000
Total	$514,000		$514,000

Each product requires an investment of $278,000. A rate of 12% has been selected for the net present value analysis.

Present Value of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	0.890	0.826	0.797	0.756	0.694
3	0.840	0.751	0.712	0.658	0.579
4	0.792	0.683	0.636	0.572	0.482
5	0.747	0.621	0.567	0.497	0.402
6	0.705	0.564	0.507	0.432	0.335
7	0.665	0.513	0.452	0.376	0.279
8	0.627	0.467	0.404	0.327	0.233
9	0.592	0.424	0.361	0.284	0.194
10	0.558	0.386	0.322	0.247	0.162

Required: 1a. Compute the cash payback period for each product. Cash Payback Period 2 years V Home & Garden Music Beat 1b. Compute the net present value. Use the present value of $1 table above. If required, round to the nearest dollar 2years Home & Garden Music Beat Present value of net cash flow total Less amount to be invested Net present value 2. Because of the timing of the receipt of the net cash flows, the home & garden magazine expansion offers a higher net present value