TechNova Inc. is considering two investments. The company's required rate of return is 14%. Use appropriate...
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TechNova Inc. is considering two investments. The company's required rate of return is 14%. Use appropriate factors from the tables provided.
- Project X: Initial Investment: $600,000; Year 1: $200,000; Year 2: $250,000; Year 3: $300,000; Year 4: $100,000
- Project Y: Initial Investment: $700,000; Year 1: $250,000; Year 2: $300,000; Year 3: $350,000; Year 4: $150,000
- a. Calculate the payback period for each project. Based on the payback period, which project is preferred?
- b. Calculate the net present value for each project. Based on the net present value, which project is preferred?
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