JKL Foods is analyzing two potential investments. The projected cash flows for each project are...
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JKL Foods is analyzing two potential investments. The projected cash flows for each project are listed below. The firm’s discount rate is 10%.
Year | Project 3 | Project 4 |
0 | -$60,000 | -$70,000 |
1 | $15,000 | $20,000 |
2 | $20,000 | $25,000 |
3 | $25,000 | $30,000 |
4 | $10,000 | $15,000 |
a. Determine the payback period for each project. b. Compute the NPV and decide which project is better.
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