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Exercise 12-2 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
Exercise 12-2 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 AA BB CC 1 $8,750 $12,500 $16,250 2 11,250 12,500 15,000 3 15,000 12,500 13,750 Total $35,000 $37,500 $45,000 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 PW table. (a) Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.) AA years BB years CC years
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