Solution-Prepare a brief report advising management

Prepare a brief report advising management

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Reference no: EM132690546

Problem - Cash payback period, net present value method, and analysis

Lifestyle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follows:

Year	At Home Chef	Music Beat
1	$170,000	$140,000
2	150,000	180,000
3	100,000	90,000
4	55,000	60,000
5	25,000	30,000
Total	$500,000	$500,000

Each product requires an investment of $320,000. A rate of 10% has been selected for the net present value analysis.

Instructions -

1. Compute the following for each product:

a. Cash payback period.

b. The net present value. Use the present value of $1 table appearing in this chapter.

2. Prepare a brief report advising management on the relative merits of each of the two products.

Reference no: EM132690546

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Prepare a brief report advising management

Reference no: EM132690546

Reference no: EM132690546

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