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James company has two very good businesses. Each of them has an initial investment of S 25,000 with cash flow respectively as follows: Year business

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James company has two very good businesses. Each of them has an initial investment of S 25,000 with cash flow respectively as follows: Year business 1 CF business 2 CF 1 7500 7500 2 7000 7500 3 6000 7500 4 5000 7500 5 3500 7500 If it is known that the cost of capital is 12.5% then calculate how much: a. Payback Period and its NPV. b. Which business do you think is chosen between Business 1 and Business 2

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