Axis Corp. is studying two mutually exclusive projects. Project Kelvin involves an overhaul of the existing$$ system; it will cost $$$$52$ comma $500$ and generate cash inflows of $$$$30$ comma $000$ per year for the next $3$ years. Project Thompson replaces the existing$$ system; it will cost $$$$275$ comma $000$ and generate cash inflows of $$$$61$ comma $000$ per year for $6$ years. Using$$ a$($n$)8\mathrm{.}23\%$ cost of$$ capital, calculate each$$ project's NPV$,$ and make a recommendation based on your findings.

Question content area bottom

Part $1$

The NPV of project Kelvin is $$$