Solution-Calculate the net present value of each given

Calculate the net present value of each given project

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Reference no: EM131326800

Capital Investment Analysis

Gyro Corporation is considering two investment projects, each of which will cost $1,340,000. The estimated cash flow for each project is as follows.

Year	Plant Expansion	Retail Store Expansion
1	450,000	500,000
2	450,000	400,000
3	340,000	350,000
4	280,000	250,000
5	180,000	200,000
Total	1,700,000	1,700,000

The company has decided that a 10% discount rate is appropriate for each project.

Required:

1. Calculate the payback period for each project.
2. Calculate the Net Present Value (NPV) of each project.
3. Advise management on which, if either, project to pursue and why.

Use an Excel spreadsheet for your answers.
You need to do deep and clear analysis.
Show your work by writing the formulas.
Follow the instructions carefully.

Reference no: EM131326800

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Calculate the net present value of each given project

Reference no: EM131326800

Reference no: EM131326800

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