Question

The Kweller Company is considering two different capital investment projects with the following cash flows

	Commerce		Sawdust
Year 0	(20,000)		(18,000)
Year 1	8,000		4,000
Year 2	6,000		8,000
Year 3	4,000		6,000
Year 4	3,000		3,000

As needed, the company uses a 4% interest rate for capital investment decisions.

1. What is the cash payback period for Commerce? Round your final answer to two decimal places.

2. What is the net present value (NPV) for Sawdust? Round your final answer to the nearest whole dollar.

Answer 1

computation ap cash payback period Por Commer ce eash GnPlows pa cneven the paback periodca becakculauted asPlloss paybact periad Aluimber afepears duing ohich itial Trvest ent Can be vecauered t nrecovered cost cash inplas duvincy CooD the yecar yeavs 2000 3000 3 0.67 Cash payback period 2.61years

Compeetation af net presentalue Cpu Por Sawdcest precert of cash GnPao alee yead cashnPro DUF@4 $846 O'9615 $C1000 f $コ3968 O:92446 8000 5333.4 8889 3 2 00 504 4 19/40 6 85p8 3000 present valee af cash nPlouws Initial nuest ment Net present valcee orygG C8000)