s analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $5,000,000 for the year. Larissa Brown?, staff analyst at Miltons?, is preparing an analysis of the three projects under consideration by Chris Miltons?, the?company's owner.

Miltons Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $5,000,000 for the year. Larissa Brown, staff analyst at Miltons, is preparing an analysis of the three projects under consideration by Chris Miltons, 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 i Data Table X Read the requirements A. Easy to understand and captures uncertainty about expected cash flows in later years of a project O B. Indicates whether or not the project will earn the company's minimum required rate of return A C D O C. Utilizes the time value of money and computes each project's unique rate of return Project A Project B Project C O D. All of the above 2 Projected cash outflow 3 Net initial investment $ 3,000,000 $ 2, 100,000 $ 3,000,000 Limitations of the payback method: 4 |Projected cash inflows O A. Cannot be used when management's required rate of return varies from one period to the next. 5 Year 1 $ 1,200,000 $ 1,200,000 $ 1,700,000 B. Fails to incorporate the time value of money and does not consider a project's cash flows after the payback period 6 Year 2 1,200,000 600,00 1,700,000 O C. Cannot be used for projects with unequal periodic cash flows 7 Year 3 1,200,000 500,000 200,000 O D. All of the above 8 Year 4 1,200,000 100,000 b. Calculate the payback period for each of the three projects. Ignore income taxes. (Round your answers to two decimal places 9 Required rate of return 3% 8% 8% Project A years Project B years Print Done Project C years inter any number in the edit fields and then click Check