X-treme Vitamin Company is considering two investments, both of which cost $36,000. The cash flows are as follows:
| Year |
Project A |
Project B |
|
1
|
38,000 |
36,000 |
| 2 |
10,000 |
8,000 |
| 3 |
12,000 |
18,000 |
a. In year (s) Calculate the payback period for Project A and Project B
Project A =
Project B =
b. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent
Project A =
Project B =