Part 1:

An investment project requires a net investment of $100,000. The project is expected to generate annual net cash inflows of $25,000 for the next 5 years. The firm's cost of capital is 12 percent. Determine the payback period for the project.

Select one: a. 0.28 years b. 1.4 years c. 3.57 years d. 4.00 years

Part 2:

An investment project requires a net investment of $100,000. The project is expected to generate annual net cash inflows of $40,000 for the next 5 years. The firm's cost of capital is 10 percent. Determine the discounted payback period for the project.

Select one: a. 2.12 years b. 2.50 years c. 3.02 years d. 4.00 years