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Solaris Energy Solutions has two potential projects with the following cash flows. The company's required rate of return is 7%. PV of $1 (5%) ,

  1. Solaris Energy Solutions has two potential projects with the following cash flows. The company's required rate of return is 7%. PV of $1 (5%), PVA of $1 (5%), PV of $1 (7%), and PVA of $1 (7%).

Year

Project Sun

Project Wind

0

$(500,000)

$(400,000)

1

$100,000

$80,000

2

$120,000

$90,000

3

$150,000

$120,000

4

$200,000

$160,000

a. Determine the payback period for each project. Which project has the shorter payback period? b. Determine the net present value for each project. Which project has the higher NPV?

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