Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $27,500. Each project will last for 3 years and produce the following net annual cash flows. Year 1 2 3 Total (a) AA AA BB CC 11,250 BB $8,750 $12,500 $16,250 15,000 12,500 12,500 CC $35,000 $37,500 The equipment's salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cash payback period over 2 years. Doug's required rate of return is 12%. Click here to view the factor table. 15,000 13,750 Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.) $45,000 years years years
Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $27.500. Each project will last for 3 years and produce the following net annual cash flows. The equipment's salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cash payback period over 2 years. Doug's required rate of return is 12%. Click here to view the factor table. (a) Compute each project's payback period. (Round onswers to 2 decimal places, eg. 15.25.) AA years BB years CC years Compute each project's payback period. (Round answers to 2 decimal places, eg. 15.25) AA BB CC years years years Which is the most desirable project? The most desirable project based on payback period is Which is the least desirable project? The least desirable project based on payback period is (b) Compute the net present value of each project. (Enter negotive amounts using elther a negative sign preceding the number es. -45 or parentheses eg. (45). Round final answers to the nearest whole dollar, es 5,275. For calculation purposes, use 5 decimal places as displayed in the foctor table provided.) AA BB Compute the net present value of each project. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses eg. (45). Round final answers to the nearest whole dollar, es. 5,275. For colculation purposes, use 5 decimal places as displayed in the factor table provided) AA BB CC Which is the most desirable project based on net present value? The most desirable project based on net prestent value is Which is the least desirable project based on net present value? The least desirable project based on net present value is Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $27.500. Each project will last for 3 years and produce the following net annual cash flows. The equipment's salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cash payback period over 2 years. Doug's required rate of return is 12%. Click here to view the factor table. (a) Compute each project's payback period. (Round onswers to 2 decimal places, eg. 15.25.) AA years BB years CC years Compute each project's payback period. (Round answers to 2 decimal places, eg. 15.25) AA BB CC years years years Which is the most desirable project? The most desirable project based on payback period is Which is the least desirable project? The least desirable project based on payback period is (b) Compute the net present value of each project. (Enter negotive amounts using elther a negative sign preceding the number es. -45 or parentheses eg. (45). Round final answers to the nearest whole dollar, es 5,275. For calculation purposes, use 5 decimal places as displayed in the foctor table provided.) AA BB Compute the net present value of each project. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses eg. (45). Round final answers to the nearest whole dollar, es. 5,275. For colculation purposes, use 5 decimal places as displayed in the factor table provided) AA BB CC Which is the most desirable project based on net present value? The most desirable project based on net prestent value is Which is the least desirable project based on net present value? The least desirable project based on net present value is
