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Aqua Marine Inc is considering two new projects with the following cash flows. The company's required...

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Accounting

  1. Aqua Marine Inc is considering two new projects with the following cash flows. The company's required rate of return is 11%. PV of $1 (5%), PVA of $1 (5%), PV of $1 (11%), and PVA of $1 (11%).

Year

Project Sea

Project Ocean

0

$(600,000)

$(450,000)

1

$150,000

$100,000

2

$160,000

$120,000

3

$170,000

$140,000

4

$190,000

$160,000

a. Determine the payback period for each project. Which project is preferred based on the payback period? b. Determine the net present value for each project. Which project is preferred based on the NPV?

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