In: Finance
Capital Budgeting
Social Circle Publications Inc. is considering two new magazine products. The estimated net cash flows from each product are as follow:
Year |
Sound Cellar |
Pro Gamer |
1 |
65,000 |
70,000 |
2 |
60,000 |
55,000 |
3 |
25,000 |
35,000 |
4 |
25,000 |
30,000 |
5 |
45,000 |
30,000 |
Total |
220,000 |
220,000 |
Each product requires an investment of $125,000. A rate of 10% has been selected for the net present value analysis.