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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows:
|
year |
Sound Cellar |
Pro Gamer |
|
1 |
$ 65,000 |
$ 70,000 |
|
2 |
60,000 |
55,000 |
|
3 |
25,000 |
35,000 |
|
4 |
25,000 |
30,000 |
|
5 |
45,000 |
30,000 |
|
Total |
$220,000 |
$220,000 |
|
Each product requires an investment the net present value analysis. |
of $125,000. |
A rate of 10% has been selected for |
|
instructions |
|
|
1. Compute the following for each product:
a. Cash payback period.
b. The net present value. Use the present value of $1 table appearing in this chapter (Exhibit 2).
2.
Prepare a brief report advising management on the relative merits of each of the two products.![]()
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