# ACCT 100 Compute the cash payback period for each project

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## ACCT 100 Compute the cash payback period for each project

Ch 26 HW

1. Question
2. PR.26-1.AQuestion
3. PR.26-2.A

Progress:2/2 items

1. eBookCalculatorCash Payback Period, Net Present Value Method, and AnalysisElite 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.

 Present Value of \$1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162

Required:1a.  Compute the cash payback period for each project.

 Cash Payback Period Plant Expansion 2 years Retail Store Expansion 2 years

1b.  Compute the net present value. Use the present value of \$1 table above. If required, round to the nearest dollar.

 Plant Expansion Retail Store Expansion Present value of net cash flow total \$ \$ Less amount to be invested \$ \$ Net present value \$ \$