Andrews construction is analyzing it's capital expenditure proposal for the purchase of equipment in the coming year. Tue capital budget is limited to $6,000,000 for the year. Linda is presenting an analysis of the three projects under consideration.

*I already answered requirement 1. I am struggling using the PV formula to calculate the NPV. Can you please confirm do I pull the interest rate from the present value table provided for 10%? Example 1,000,000/(1+0.909)^2=? I am struggling how include the project year (or second power) into my calculation. Thank you.

Requirements Because the company's cash is limited, Andrews thinks the payback method should be used to choose between the capital budgeting projects. What are the benefits and limitations of using the payback method to choose between projects? Calculate the payback period for each of the three projects. Ignore income taxes. Using the payback method, which projects should Andrews choose? Baker thinks that projects should be selected based on their NPVs. Assume all cash flows occur at the end of the year except for initial investment amounts. Calculate the NPV for each project. Ignore income taxes Which projects, if any, would you recommend funding? Briefly explain why. B 1. 1 Project A Project B Project C. 2 Projected cash outflow 3 Net Initial investment $ 3.000.000$ 1.500.000 $ 4.000.000 4 Projected cash inflows 5 Year 1 $ 1.000.000 S 400.000 $ 2.000.000 6 Year 2 1.000.000 900 000 2.000.000 1.000.000 800.000 200.000 8 Year 4 1.000.000 100.000 9 Required rate of return 1095