homework

A small aviation school is evaluating the merits of two independent projects - a fullmotion flight simulator, and an instrument device offering state-of-the-art nighttime flight guidance. Both projects are expected to have 5-year life cycles. The flight simulator has an initial cost of $150,000, and it is expected to generate net revenues of $40,000 per year for each of the next 5 years. The instrument device costs $85,000 today, and it has expected net revenues for the next 5 years of $20,000 per year. Within its financial evaluations, the aviation school uses a discount rate of 10% for all projects. Question 1 (1 point) Calculate the Payback Period for the flight simulator. 3.25 years 3.75 years 4.25 years 4.75 years None of the above. Calculate the Payback Period for the instrument device. 4.25 years 4.75 years 5.25 years 5.75 years None of the above