E21-27 (similar to) Question Helpe Cranes Construction is anatying ts captal ependiture propesals for the purchase of equipment in the coming year The captal budget is limted to $12,000,000 for the year Linda Baker, staff analyst at Cranes, is preparing an analysis of the three projects under consideraton by Conan Cranes, the company's owner (Cick the icon to view the data for the three projects) Eresent Vaue of 51 tatle Pent Value ot Amuty ot31 EutureVue of $1 tatle Euture Value ot Arnuty of $1 table Read the requirenents Requirement 1. Because the company's cash limed Cranes thnks the payback method should be used to choose beeen the capital budgeting projects a. What are the benetts and imtations of using the payback method to choose between projects Benetts of the payback method OA ndcates whether or nol the project wi eam the company's minimum requred rate of reum OB Uzes the tme value oft money and computes each projects unique rate of return OC Easy to undentand and captures uncertainty atout expected cash fows in ater years of a project OR Al of the above e oeele anw and rk Check Anw Data Table Project A Project B Project C Projected cash outflow S 6,000,000 $ 4,000,000 S 8,000,000 Net initial investment Projected cash inflows Year 1 S 2,050,000 S 1,100,000 S 4,700,000 Year 2 2,050,000 2,300,000 4,700,000 Year 3 2,050,000 700,000 50,000 Year 4 2,050,000 25,000 Required rate of return 10% 10% 10% Print Done X