Question: Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 12
| Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 12 percent. |
| Year | Project F | Project G | ||
| 0 | $ | 131,000 | $ | 201,000 |
| 1 | 62,000 | 42,000 | ||
| 2 | 48,000 | 57,000 | ||
| 3 | 58,000 | 88,000 | ||
| 4 | 53,000 | 118,000 | ||
| 5 | 48,000 | 133,000 | ||
| Required: |
| (a) | Calculate the payback period for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Payback period | |
| Project F | years |
| Project G | years |
| (b) | Calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Net present value | |
| Project F | $ |
| Project G | $ |
| (c) | Which project should the company accept? |
| (Click to select)Project GProject F |
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