Requirements 2&3

Andrews Construction is analyzing Question Help EH is preparing an analysis its capital expenditure proposals for the purchase of equipment in the Doming year The capital budget islimited to $5,000,000 for the year Lori Bart staff analyst (click the ioon of the three under oonsideration by Corey Andrews, the companys owner to view the data for the three projects) (clid the icon to view the Future value of s1 fadors) (Clio the ioon to view the Future Value of Annuity of s1 fadors) aid the ioon to view the Present value of 31 factors B(click the icon to view the Present value of Annuity of st factors) Requirement 1. Because the companys oash is limited. Andrews thinks the paybad method should be used to choose between the oapital budgeting projects a. What are the benefits and limitations of using the payback method to choose between projects? Benefits of the payback method ndioates whether or not the projed will earn the company minimum required rate of return Utilizes the time value of money and oompuies each projeors unique rate of return Mc Easy to understand and captures unoertainty about expected oash nows in later years of a projea All of the above minations of the paybad method Cannot be used for projects with unequal periodio cash flows Cannot be used when managements required rate of return varies from one period to the next Fails to incorporate the time value of money and does not oonsider a project's oash flows aner the paybad period b. Calculate the paybad period for each of the three projeots lanore inoome taxes (Round your answer to two decimal plaoes