The Spring Water Company uses both the Net Present Value and the Payback Period to evaluate...

   

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The Spring Water Company uses both the Net Present Value and the Payback Period to evaluate their projects. The Company's required rate of return on this project is 11.3% and the required payback period is no more than 6 years. The cash flow for the project has been determined to be: < Year 0 1 2345 5 Cash Flow ($158,000) $46,730 $51,270 $69,930 $10,000 ($46,000) Required: A. Calculate the Net Present Value for this project B. Calculate the Payback Period for this project. C. Should the Spring Water Company accept or reject this project? Why? ( The Spring Water Company uses both the Net Present Value and the Payback Period to evaluate their projects. The Company's required rate of return on this project is 11.3% and the required payback period is no more than 6 years. The cash flow for the project has been determined to be: < Year 0 1 2345 5 Cash Flow ($158,000) $46,730 $51,270 $69,930 $10,000 ($46,000) Required: A. Calculate the Net Present Value for this project B. Calculate the Payback Period for this project. C. Should the Spring Water Company accept or reject this project? Why? (

Answer rating: 100% (QA)

A To calculate the Net Present Value NPV for the project we use the formula NPV sumt0N CFt1 rt Where ... View the full answer