OPQ Retailers has the option to invest in two different projects. The expected cash flows...
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OPQ Retailers has the option to invest in two different projects. The expected cash flows are as follows. The discount rate is 9%.
Year | Project 1 | Project 2 |
0 | -$75,000 | -$85,000 |
1 | $25,000 | $30,000 |
2 | $30,000 | $35,000 |
3 | $20,000 | $25,000 |
4 | $15,000 | $20,000 |
a. Determine the payback period for each project. b. Compute the NPV and indicate which project should be accepted.
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