Problem 12-10 Payback and net present value [L012-3, 12-4] x-treme Vitamin Company is considering two investments, both of which cost $18,000. The cash flows are as follows: Year Project A Project B 1S20000 $18,000 7,000 12,000 8.000 7,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) Payback Period yean year Project A Project B a-2. Which of the two projects should be chosen based on the payback method? Project A Project B b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Net Present Value Project A Project B b-2. Which of the two projects should be chosen hased on the net present value method? Project B ProjectA c. Should a firm normally have more confidence in the payback method or the net present value method? Payback method Net present value method