Question: Can I get help with the below and determining which is the best project? ABC Companys management is also considering 3 new projects consisting of
Can I get help with the below and determining which is the best project?
ABC Companys 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 | $15,000 |
| Cash Flows Year 2 | $36,000 | $74,000 | $12,000 |
| 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 |
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