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Innovative Tech Ventures is evaluating two tech innovation projects. The company's required rate of return is...

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Accounting

Innovative Tech Ventures is evaluating two tech innovation projects. The company's required rate of return is 17%. Use appropriate factors from the tables provided.

  • Project Innov1: Initial Investment: $650,000; Year 1: $220,000; Year 2: $240,000; Year 3: $260,000; Year 4: $120,000
  • Project Innov2: Initial Investment: $700,000; Year 1: $250,000; Year 2: $270,000; Year 3: $290,000; Year 4: $140,000
  • a. Calculate the payback period for each project. Based on the payback period, which project is preferred?
  • b. Calculate the net present value for each project. Based on the net present value, which project is preferred?

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