Cepeda Manufacturing Company is considering three new projects, each requiring an equipment investment of $22,000. Each project will last for 3 years and produce the following cash inflows.

Year		AA		BB		CC
1		$7,000		$9,500		$11,000
2		9,000		9,500		10,000
3		15,000		9,500		9,000
Total		$31,000		$28,500		$30,000

The equipment's salvage value is zero. Cepeda uses straight-line depreciation. Cepeda will not accept any project with a payback period over 2 years. Cepeda's minimum required rate of return is 12%.