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I need part B please! PR 25-2B Cash payback period, net present value method, and analysis for a service company Obj. 2, 3 Social Circle
I need part B please!
PR 25-2B Cash payback period, net present value method, and analysis for a service company Obj. 2, 3 Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows EXCEL TEMPLATE Year Sound Cellar Pro Gamer 70,000 55,000 35,000 30,000 30,000 $220,000 65,000 60,000 25,000 25,000 45,000 $220,000 4 Total Each product requires an investment of $125,000. A rate of 10% has been selected for the net present value analysis 1.A. $125,000 Initial investment: Sound Cellar Pro Gamer Net Cash Flow Net Cash Flow Cumulative Net Cumulative Net Cash Flows $65,000 125,000 150,000 175,000 220,000 Cash Flows $70,000 125,000 160,000 190,000 220,000 $65,000 60,000 25,000 25,000 45,000 $70,000 55,000 35,000 30,000 30,000 Year 1 Year 2 Year 3 Year 4 Year 5 The Sound Cellar magazine achieves payback in Year 2 The Pro Gamer magazine achieves payback in Year 2 Either magazine is recommended, based on the cash payback period Net Present Value Analysis Present Value of Net Cash Flow Present Value of $l at 10% Net Cash Flow Sound Cellar ound Cellar Pro Gamer Pro Gamer Year 1 Year 2 Year 3 Year 4 Year 5 Total Amount to be invested Net present value magazine is recommended, based on its higher net present valueStep by Step Solution
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