Calculate the npv profitability index for these two


Cucamonga Electronics Inc. is considering two new product lines; CD players and DVRs. Both require an immediate investment of $1,000,000. Cucamonga Electronics Inc. has a required rate of return of 14%.

Annual Net Cash Inflows

Year                            CD Players                            DVRs

1                                  305,450                                  500,000

2                                  305,450                                  350,000

3                                  305,450                                  300,000

4                                  305,450                                  250,000

5                                  305,450                                  40,000

Required. Calculate the NPV, Profitability Index for these two investments. What is the payback period for each? Which project, if any, should we pursue? Why?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Calculate the npv profitability index for these two
Reference No:- TGS02860089

Expected delivery within 24 Hours