Question

McMorris Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows:





Each product requires an investment of $400,000. A rate of 10% has been selected for the net present value analysis.

Instruction
1. Compute the following for each product:
a. Cash payback period.
b. The net present value. Use the present value of $1 table appearing in this chapter.
2. Prepare a brief report advising management on the relative merits of each of the two products.



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  • CreatedFebruary 04, 2014
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