Question Help Rozzis Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $9,000,000 for the year, Linda Benson, staff aralyst at Rozzi, is preparing an analysis of the three projects under consideration by Corey Rouris, the company's owner (Click the icon to view the data for the three projects.) Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements Requirement 1. Because the company's cash is limited, Rozzis thinks the payback method should be used to choose between the capital budgeting projects a. What are the benefits and limitations of using the payback method to choose between projects? Benefits of the payback method: O A Easy to understand and captures uncertainty about expected cash flows in later years of a project OB. Indicates whether or not the project will earn the company's minimum required rate of retum OC. Utizes the time value of money and computos each project's unique rate of return OD. All of the above Limitations of the payback method: O A Fals to incorporate the time value of money and does not consider a project's cash flows after the payback period OB. Cannot be used when management's required rate of return varies from one period to the next OC Cannot be used for projects with unequal periodo cash flow D. All of the above Enter any number in the edit fields and then continue to the next question Save for Later MacBook Pro FI $ A * # 3 % 5 & 7 a 6 8 9 E R T Y U O Rozzis Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $9,000,000 for the year, Linda Benson, staff analyst at Rozzis, is preparing an analysis of the three projects under consideration by Corey Rezis, the company's owner (Click the icon to view the data for the three projects.) Present Value of 1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value Acuity of the Read the requirements b. Calculate the payback period for each of the three projects. Ignore income taxes (Round your answers to two decimal places) Project years Project years Project years Using the payback method, which project(s) should Rozis choose? Requirement 2. Calculate the NPV for each project. Ignore income taxes (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative not present values.) The NPV of Projects The NPV of Project is VO The NPV of Projects Requirement 3. Which projects, if any, would you recommend funding? Briefly explain why Enter any number in the edit fields and then continue to the next question Save for later MacBook Pro FB 14 % 5 & 7 70 8 9 3 6 0 P E R U Q Y The NPV of Project Ais The NPV of Project Bis los The NPV of Project is Requirement 3. Which projects, if any, would you recommend funding? Briefly explain why. The method is generally regarded as the preferred method for project selection decisions, therefore, the company should consider investing in the projects) with Since the company's is limited by the it can make during the year, if more than one project fits this criteris, they should choose the investment(s) with the Prior to making a final decision, the company should also consider the nonfinancial qualitative factors of the investments such as the Using only the NPV calculations from requirement 2, Rozzis should invest in Enter any number in the edit fields and then continue to the next question Save for later MacBook Pro esc FT % # 3 6 7 8 9 E Me T Y U P O 70 I S D G . K The NPV of Project Bis The NPV of Project is Requirement 3. Which projects, if any, would you recommend funding? Briefly explain why method is generally regarded as the preferred method for project selection decisions, therefore, the company should consider investing in the projects with limited by the it can make during the year, if more than one project fits this criteria, they should choose the investments with the NPV Prior to making a final decision, the company should also consider the nonfinancial qualitative factors of the investments such as the payback Sind Using only the NPV calculations from requirement 2, Roazis should invest in Enter any number in the edit fields and then continue to the next question, Save for later MacBook Pro CD W 3 $ 4 % 5 9 7 6 2 T Y W E R J H G F s D JKI 5 M Z V B C Z The NPV of Projects Requirement 3. Which projects, if any, would you recommend funding? Brilly explain why The method is generally regarded as the preferred method for project selection decisions. Therefore, the company should consider investing in the projects with Since the company's is limited by the it can make during the year, it more than one project fits this criteria, they should Prior to making a final decision, the company should also consider the nonfinancial qualitative factors of the invad a negative NPV a payback under 2 years positive NPV the shortest payback period Using only the NPV calculations from requirement 2, Rozzis should invest in Enter any number in the edit fields and then continue to the next question Save for Later MacBook Pro $ 2 % 5 3 8 7 8 9 W E R T Y U DOP A s D F G H J K L z X B N.