FutureTech Robotics is considering two robotics projects. The company’s required rate of return is 18%. Use...
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FutureTech Robotics is considering two robotics projects. The company’s required rate of return is 18%. Use appropriate factors from the tables provided.
Project RoboA: Initial Investment: $550,000; Year 1: $180,000; Year 2: $200,000; Year 3: $220,000; Year 4: $100,000
Project RoboB: Initial Investment: $600,000; Year 1: $200,000; Year 2: $220,000; Year 3: $240,000; Year 4: $120,000
a. Compute the payback period for each project. Based on the payback period, which project is preferred?
b. Compute the net present value for each project. Based on the net present value, which project is preferred?
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