Dougs Custom Construction Company is considering three new projects, each requiring an equipment investment of $25,960. Each project will last for 3 years and produce the following net annual cash flows. Year AA BB CC

1 $8,260 $11,800 $15,340 2 10,620 11,800 14,160 3 14,160 11,800 12,980

Total $33,040 $35,400 $42,480

The equipments salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cash payback period over 2 years. Dougs required rate of return is 12%. Click here to view PV table.

(b) 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.)

AA

BB CC

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