Exercise 11-9 (Algo) Payback period; net present value; unequal cash flows LO P1, P3

Gonzalez Company is considering two new projects with the following net cash flows. The companys required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1)

Note: Use appropriate factor(s) from the tables provided.

Year	Net Cash Flows
Project 1	Project 2
Initial investment	$(50,000)	$(70,000)
1.	10,000	35,000
2.	25,300	22,000
3.	30,000	25,000

1. Compute payback period for each project. Based on payback period, which project is preferred?
2. Compute net present value for each project. Based on net present value, which project is preferred?