15C

eBook Cash Payback Period, Net Present Value Method, and Analysis GWH Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows: Year Primitive Camping Lakeside Fishing 1 $89,000 $106,000 87,000 2 104,000 3 75,000 71,000 4 68,000 50,000 5 21,000 43,000 $357,000 Total $357,000 A Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% Year 0.870 1 0.833 0.943 0.909 0.893 2 0.694 0.890 0.826 0.797 0.756 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 B 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Fach product requires an Investment of $193,000. A rate of 10% has been selected for the net present value analysis 9 0.592 0.424 0.361 0.24 0.194 10 0.558 0.380 0.322 0.24 0.162 Each product requires an investment of $193,000. A rate of 109 has been selected for the net present values Required: 1a. Compute the cash payback period for each project. Cash Payback Period Primitive Camping Lakeside Fishing 2 years 2 years