Calculate the net present value for each project

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Reference no: EM132254391

Northern Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project A Project B Initial Investment $800,000 $650,000 Annual Net Income $50,000 $45,000 Annual Net Cash Flow $220,000 $200,000 Salvage Value $0 $0 Estimated Useful Life 5 years 4 years The company requires a 10% rate of return on all new investments. Part (a): Calculate the payback period for each project. Part (b): Calculate the net present value for each project. Part (c): Calculate the internal rate of return for each project. Part (d): Calculate the accounting rate of return for each project. Part (e): Which project should Northern Company accept and why?

Reference no: EM132254391

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