Sunland company is considering two capital investment proposals. estimates regarding each project are provided below. project soup project nuts initial investment $600,000 $900,000 annual net income $30,000 $63,000 annual cash inflow $150,000 $213,000 salvage value $0 $0 estimated useful life 5 years 6 years the company requires a 10% rate of return on all new investments. part (a): calculate the payback period for each project. part (b): calculate the net present value for each project. part (c): which project should carr company accept and why?

a. 4 years and 4.22 years

b.  -$31,350 and $27,615

c. Project Nuts

Explanation:

a. The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

For project soup, it would be

= $600,000 ÷ $150,000

= 4 years

For project nuts, it would be

= $900,000 ÷ $213,000

= 4.22 years

b. The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor - initial investment

For project soup, it would be

= $568,650 - $600,000

= -$31,350

The present value is computed below:

= Annual cash flow × pvifa for 5 years at 10%

= $150,000 × 3.791

= $568,650

For project nuts, it would be

= $927,615 - $900,000

= $27,615

The present value is computed below:

= Annual cash flow × pvifa for 6 years at 10%

= $213,000 × 4.355

= $927,615

Kindly refer pvifa table

c. The project Nuts should be accepted as it has positive net present value.

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.