Question
NPV and Payback Period. Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company...
NPV and Payback Period. Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 10 percent.
Year Project F Project G
0 −$180,000 -$280,000
1 93,600 64,800
2 64,800 86,400
3 81,600 123,600
4 72,000 166,800
5 64,800 187,200
*All calculations must be in EXCEL.
a.Calculate the payback period for both projects.
b.Calculate the NPV for both projects.
c.Which project, if any, should the company accept NPV and Payback Period.
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