PR 26-2A At Home Publications Inc. is considering two new magazine products. Th

PR 26-2A
At Home Publications Inc. is considering two new magazine products. The
estimated net cash flows from each product are as follows:Year Home & Garden Music Beat1 $150000 $1250002 120000 1450003 105000 1000004 84000 700005 41000 60000Total $500000 $500000Each product requires an investment of $270000. A rate of 10% has been selected for the net present value analysis.Instructions1. 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.Check: 1. b. Home & Garden $ 127158