# At Home Publications Inc. is considering two new magazine products. The estimated net cash flows from each

## Question:

At Home 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 $270,000. A rate of 10% has been selected for the net present value analysis.Instructions1. 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.

Net Present ValueWhat is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...

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