Calculate the payback period for each project

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Reference no: EM13273521

Jackson Company is considering two capital investment proposals. Estimates regarding each project are provided below.

	Project Nuts	Project Bolts
Initial Investment	$175,000	$100,000
Annual Net Income	$30,000	52,000
Annual Cash Inflow	$70,000	$45,000
Salvage Value	$0	$0
Estimated Useful Life	3 years	3 years

The company requires a 9% 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): Which project should Jackson Company accept and why?

Reference no: EM13273521

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