OPQ Retailers has the option to invest in two different projects. The expected cash flows are as follows. The discount rate is 9%.
Year
Project 1
Project 2
0
-$75,000
-$85,000
1
$25,000
$30,000
2
$35,000
3
$20,000
4
$15,000
a. Determine the payback period for each project. b. Compute the NPV and indicate which project should be accepted.
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