Payback Period and Net Present Value
XYZ Software, Inc., has the following mutually exclusive projects.
|
Year
|
Project A
|
Project B
|
|
0
|
$
|
-9,960
|
$
|
-10,400
|
|
1
|
|
6,800
|
|
5,800
|
|
2
|
|
4,100
|
|
2,900
|
|
3
|
|
2,700
|
|
6,900
|
|
|
|
|
|
|
Requirement 1:
(a) What is the payback period for Project A?
Payback period years
(b) What is the payback period for Project B? (Round your answer to 3 decimal places. (e.g., 32.16))
Payback period years
Requirement 2:
(a) What is the NPV for Project A assuming a discount rate of 14 percent? (Negative amount should be indicated by a minus sign. Do not include the dollar sign ($).
Net present value $
(b) What is the NPV for Project B assuming a discount rate of 14 percent? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.
Net present value $