ABC Company's management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make all 3 purchases. The information is as follows for the purchases below.

Project 1

Project 2

Project 3

Purchase Price

$80,000

$175,000

$22,700

Required Rate of Return

6%

8%

12%

Time Period

3 years

5 years

2 years

Cash Flows - Year 1

$48,000

$85,000

$13,000

Cash Flows - Year 2

$36,000

$74,000

$13,000

Cash Flows - Year 3

$22,000

$38,000

N/A

Cash Flows - Year 4

N/A

$26,800

N/A

Cash Flows - Year 5

N/A

$19,000

N/A

• Calculate using Excel formulas, the NPV of each of the 3 projects.
• It is possible that ABC Company may not be able to work on all 3 projects. Therefore, advise ABC Company as to the order in which they should pursue the projects (i.e., which project should ABC Company attempt to do first, second, and last).

Provide justification and analysis as to why you chose the order you did.