Question

Problem 8-21 NPV and Payback Period [LO 1, 4] 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 12 percent. Year Project F Project G 0 –$ 141,000 –$ 211,000 1 57,000 37,000 2 53,000 52,000 3 63,000 93,000 4 58,000 123,000 5 53,000 138,000 Required: (a) Calculate the payback period for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period Project F years Project G years (b) Calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Net present value Project F $ Project G $ (c) Which project should the company accept?

Answer 1