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X-treme Vitamin Company is considering two investments, both of which cost $38,000. The cash flows...

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Finance

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X-treme Vitamin Company is considering two investments, both of which cost $38,000. The cash flows are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods: a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) a-2. Which of the two projects should be chosen based on the payback method? Project A Project B Project A Project B b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places.) b-2. Which of the two projects should be chosen based on the net present value method? Project B Project A c. Should a firm normally have more confidence in the payback method or the net present value method? Payback method Net present value method

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