P10-12 (book/static) Payback and NPV Nell Corporation has three projects under consideration. The cash flows for each of them are shown in the following table The firm has a cost of capital of 16% a. Calculate each project's payback period. Which project is preferred according to this method? b. Calculate each project's not present value (NPV). Which project is preferred according to this method? c. Comment on your findings in parts a and b, and recommend the best project. Explain your recommendation a. The payback period of project Ais year. (Round to two decimal places) Data Table (Click on the loon located on the top-right corner of the datatable below in order to copy its contents into a spreadsheet) Project A Project Project Initial Investment (CF) $40,000 $40,000 $40,000 Year Cash Inflows (CF) $13,000 $7,000 $19,000 $13,000 $10,000 $16,000 3 $13,000 $13,000 $13,000 4 $13,000 $16,000 $10,000 5 $13,000 $19,000 $7.000 Print Done Enter your answer in the answer box and then click Check Answer 8 remaining parts Char All P10-15 (book/static) Question Help Internal rate of retum Peace of Mind, Inc. (PMI) sells extended warranties for durable consumer goods such as washing machines and refrigerators. When PMI sells an extended warranty, it receives cash up front from the customer, but later PMI must cover any repair costs that arise. An analyst working for PMI is considering a warranty for a new line of big-screen TVs. A consumer who purchases the 2.year warranty will pay PMI $200. On average, the repair costs that PMI must cover will average $106 for each for the warranty's 2 years. If PMI has a cost of capital of 7%, should it offer this warranty for sale? The internal rate of retum (IRR) for this project in 1% (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer 2 parts remaining Call Check A