Assume that two gas stations are for sale with the following cash flows; CF1 is the Cash Flow in the first year, and CF2 is the Cash Flow in the second year. This is the time line and data used in calculating the Payback Period, Net Present Value, and Internal Rate of Return. The calculations are done for you. Your task is to select the best project and explain your decision. The methods are presented and the decision each indicates is given below.
InvestmentSales PriceCF1CF2Gas Station A$50,000$0$100,000Gas Station B$50,000$50,000$25,000
Three (3) Capital Budgeting Methods are presented: