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Business, 11.06.2020 16:57 brandonholden

Cash Payback Period, Net Present Value Method, and Analysis Elite Apparel Inc. is considering two investment projects.

The estimated net cash flows from each project are as follows:

Year Plant Expansion Retail Store Expansion

1 $450,000 $500,000

2 450,000 400,000

3 340,000 350,000

4 280,000 250,000

5 180,000 200,000

Total $1,700,000 $1,700,000

Each project requires an investment of $900,000.

A rate of 15% has been selected for the net present value analysis.

Required:

1. Compute the cash payback period for each project.

2. Compute the net present value for each project.

(Round to nearest dollar)

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