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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 14
| 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 14 percent. |
| Year | Project F | Project G | ||
| 0 | $133,000 | $203,000 | ||
| 1 | 61,000 | 41,000 | ||
| 2 | 49,000 | 56,000 | ||
| 3 | 59,000 | 89,000 | ||
| 4 | 54,000 | 119,000 | ||
| 5 | 49,000 | 134,000 | ||
| a. | Calculate the payback period for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| b. | Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| c. | Which project, if any, should the company accept? |
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