Andrews Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $ 5,000,000 for the year. Laura Baker, staff analyst at Andrews, is preparing an analysis of the three projects under consideration by Corey Andrews, the company's owner.

12 Small 1-27 (similar to capital budget is limited A i Data Table Table Construction is analyzing its capital expenditure proposals for the purchase of eq of the three projects under consideration by Corey Andrews, the company's k the icon to view the data for the three projects.) reg 1 Requirements Project Project B Project C Projected cash outflow Net initial investment $ 3,000,000 $ 2.100,000 $ 3,000,000 1. red Projected cash inflows Because the company's cash is limited, Andrews thinks the payback method should be used to choose between the capital budgeting projects a. What are the benefits and limitations of using the payback method to choose between projects? b. 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 $ alize sy 2. 1,200,000 $ 1,200,000 $ 1,700,000 1.200.000 600,000 1,700,000 1,200.000 500,000 200,000 1.200,000 100,000 3. ca of Print Done Required rate of return 896 8% ect your answer and then click Check Answer Print Done Check And