borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance. Dividends of $100,000 are to be declared and paid in February. No cash payments for income taxes are to be made during the first calendar quarter. Income taxes will be assessed at 35% in the quarter. Equipment purchases of $55,000 are scheduled for March. ABC Company's management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make all 3 purchases. The information is as follows for the purchases below. Purchase Price Project 1 $80,000 Project 2 Project 3 $175,000 $22,700 Required Rate of Return 6% 8% 12% Time Period 3 years 5 years 2 years Cash Flows - Year 1 $48,000 $85,000 $15,000 Cash Flows Year 2 $36,000 $74,000 $12,000 Cash Flows Year 3 $22,000 $38,000 N/A Cash Flows - Year 4 N/A $26,800 N/A Cash Flows Year 5 N/A $19,000 N/A