Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 11 percent.
| Year |
Project F |
Project G |
| 0 |
-$ |
144,000 |
-$ |
214,000 |
| 1 |
|
55,500 |
|
35,500 |
| 2 |
|
54,500 |
|
50,500 |
| 3 |
|
64,500 |
|
94,500 |
| 4 |
|
59,500 |
|
124,500 |
| 5 |
|
54,500 |
|
139,500 |
|
Required:
(a) Calculate the payback period for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Payback period
Project F years
Project G years
(b) Calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Net present value
Project F $
Project G $
(c) Which project should the company accept?