Exercise 26-2 Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $22,440. Each project will last for 3 years and produce the following net annual cash flows. Year AA BB CC $7,140 $10,200 $13,260 9,180 10,200 12,240 3 12,240 10,200 11,220 Total $28,560 $30,600 $36,720 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%. (Refer the below table) TABLE 3 Present Value of 1 (n) Periods 4% 5% 7% 8% 10% 11% 9% 12 15 96154 95238 94340 0.93458 92593 91743 90909 90090 89286 86957 92456 90703 89000 0.87344 85734 84168 82645 81162 79719 75614 88900 86384 83962 0.81630 79383 77218 75132 73119 .71178 65752 .85480 82270 79209 0.76290 73503 70843 68301 65873 63552 57175 82193 78353 74726 0.71299 68058 64993 62092 59345 56743 49718 79031 74622 70496 0.66634 63017 59627 .56447 53464 50663 43233 .75992 71068 66506 0.62275 58349 54703 .51316 48166 45235 37594 .73069 67684 62741 0.58201 54027 50187 46651 43393 40388 32690 70259 64461 59190 0.54393 50025 46043 42410 39092 36061 28426