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Please help Carla Vista's Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,400. Each project will last for 3
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Carla Vista's Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,400.
Each project will last for 3 years and produce the following net annual cash flows.
Year
1
2
3
Total
AA
$8,400
10,800
14,400
$33,600
BB
$12.000
12,000
12,000
$36,000
CC
$15,600
14,400
13,200
$43,200
The equipment's salvage value is zero, and Carla Vista uses straight-line depreciation. Carla Vista will not accept any project with a cash payback period over 2 years. Carla Vista's required rate of return is 12%.
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