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RST Construction is evaluating the feasibility of two new projects. The cash flow projections are...

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Accounting

RST Construction is evaluating the feasibility of two new projects. The cash flow projections are as follows. The required return is 13%.

Year

Project P

Project Q

0

-$500,000

-$550,000

1

$150,000

$160,000

2

$160,000

$170,000

3

$170,000

$180,000

4

$180,000

$190,000

a. Compute the payback period for each project. b. Calculate the NPV and recommend which project should be undertaken.

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