Reference no: EM13572947

Parkes Book Comany's management is considering an advertising program that would required an initial expenditure of $165500 and bring in additional sales over the next five years. The projected additional sales revenue in year 1 is $75000, with the associated expenses of $25000. The additional sales revenue and expenses from the advertising program are projected to increase by 10 per cent each year.(Ignore company income taxes.) Required 1 calculate the payback period for the advertising program 2. calculate the advertising program's net present value, assuming a required rate of return of 10 per cent.