Carla Vista's Custom Construction Company is considering three new projects, each requiring an equipment investment of $$26,400.$ Each project will last for $3$ years and produce the following net annual cash flows.

Year

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$1$

$$8,400$

$$12,000$

$$15,600$

$2$

$10,800$

$12,000$

$14,400$

$3$

$14,400$

$12,000$

$13,200$

Total

$$33,600$

$$36,000$

$$43,200$

The equipment's salvage value is zero, and Carla Vista uses straight$-$line depreciation. Carla Vista will not accept any project with a cash payback period over $2$ years. Carla Vista's required rate of return i here to view PV table.

$($a$)$

Compute each project's payback period.

$($Round answers to $2$ decimal places, e$.$g$.15\mathrm{.}25.)$

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years

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years

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years

Which is the most desirable project?

The most desirable project based on payback

Which is the least desirable project?

Compute the net present value of each project. $($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).$ Round final answers to the nearest whole dollar, e$.$g$.5,275.$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

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BB

CC

Which is the most desirable project based on net present value?