01 Return to question Exercise 24-9 (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 company's required rate of return on investments is 10%. (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flows Year Project 1 Project 2. Initial investment $(60,000) $(55,000) 1. 15,000 35,000 25,200 20,000 22,500 20,000 2. 3. a. Compute payback period for each project. Based on payback period, which project is preferred? b. Compute net present value for each project. Based on net present value, which project is preferred? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Compute pavback period for each project. Based on navback period, which protect is preferred? (Cumulative net cash < Prev 12 of 12 Next > Compute payback period for each project. Based on payback period, which project is preferred? (Cumulative net cash outflows must be entered with a minus sign. Do not round your intermediate calculations. Round your Payback Period answer to 2 decimal places.) Project 1 Year Net Cash Flows Cumulative Net Cash Flows Project 2 Cumulative Net Cash Net Cash Flows Flows Initial investment Year 1 $ (60,000) 15,000 $ 62,700 $ (55,000) 55,000 15,000 35,000 35,000 Year 2 25,200 20,000 Year 3 22,500 20,000 Payback period Project 1 Payback period 3.00 years Project 2 Payback period Based on payback period, which project is preferred? 2.00 years Project 2 Required A Required B > Compute net present value for each project. Based on net present value, which project is prefe value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Net Cash Flows Present Value Factor Present Value of Net Cash Flows Project 1 Year 1 $ 15,000 0.9091 $ 13,636 Year 2 25,200 0.8264 20,661 Year 3 22,500 0.7513 17,863 Totals $ 62,700 $ 52,160 Initial investment 6,000 x Net present value $ 46,160 Project 2 Year 1 $ 35,000 0.9091 $ 31,818 Year 2 20,000 0.8264 16,529 Year 3 20,000 0.7513 13,304 Totals $ 75,000 $ 61,651 Initial investment 55,000 Net present value $ 6,651 Based on net present value, which project is preferred? Project 2 < Required A Required B >