Kevin$$s Custom Manufacturing Company is considering three new projects. Each one requires an

equipment investment of $$29,600,$ will last for three years, and will produce the following net

annual cash flows:

Year AA BB CC

$1$ $$8,540$ $$11,712$ $$15,860$

$210,98011,71210,980$

$314,64011,71213,420$

Total $$34,160$ $$35,136$ $$40,260$

The equipment's salvage value is zero, and Kevin uses straight$-$line depreciation. Kevin will not

accept any project with a payback period longer than two and a half years. Kevin$$s required rate of

return is $12\%.$

Click here to view the factor table.

Calculate each project$$s payback period, using average annual cash flows. $($Round answersto $2$

decimal places, e$.$g$.10\mathrm{.}50$ and use average annual cash flowsin your calculations.$)$

Payback period

Project AA years

Project BB years

project CC years

Most desirable project

Least desirable project

eTextbook and Media

Calculate the net present value of each project. $($If the answer is negative, use either a negative

sign preceding the number e$.$g$.-5,275$ or parentheses e$.$g$.(5,275).$ For calculation purposes, use $5$

decimal places as displayed in the factor table provided, e$.$g$.1\mathrm{.}25124$ and final answersto $0$ decimal

places, e$.$g$.5,275.)$

Net present value

Project AA $

Project BB $

Project CC $

Does your evaluation change?