# I need a one paragraph

**Question description**

**Instructions: Write a 1 paragraph explain which Investment you will choose and explain why. Please provide references at the end**

Scenario Information:

Assume that two gas stations are for sale with
the following cash flows; CF1 is the Cash Flow in the first year, and
CFSubmit 2 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.

Investment |
Sales Price |
CF1 |
CF2 |

Gas Station A | $50,000 | $0 | $100,000 |

Gas Station B | $50,000 | $50,000 | $25,000 |

Three (3) Capital Budgeting Methods are presented:

**Payback Period:**Gas Station A is paid back in 2 years; CF1 in year 1, and CF2 in year 2. Gas Station B is paid back in one (1) year. According to the payback period, when given the choice between two mutually exclusive projects, the investment paid back in the shortest time is selected.**Net Present Value:**Consider the gas station example above under the NPV method, and a discount rate of 10%:**NPV**_{gas station A}= $100,000/(1+.10)^{2}- $50,000 = $32,644

NPV_{gas station B}= $50,000/(1+.10) + $25,000/(1+.10)^{2}- $50,000 = $16,115**Internal Rate of Return:**Assuming 10% is the cost of funds; the IRR for Station A is 41.421%.; for Station B, 36.602.

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