Use the NPV Method to determine whether Vargas Products should invest in the following projects:

* Project A costs $280,000 and offers eight annual net cash flows of $56,000. Vargas Products requires an annual return of 12% for projects like A.

* Project B costs $375,000and offers ten annual net cash flows of $67,000. Vargas Products demands an annual return of 10% on investments of this nature.

Requirement:

What is the NPV of each project? What is the maximum acceptable price to pay for each project?

Calculate the NPV of each project (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present values.)

The NPV of Project A is: _________

The NPV of Project B is: _________

Now calculate the maximum acceptable price to pay for each project. (Round your answers to the nearest whole dollar.)

Project A is: ____________

Project B is: ____________

*Answers only, I don't care about work; thanks.