Compute each project?s payback period.

Which is the most desirable project? Which is the least desirable project?

Compute the net present value of each project.

Which is the most desirable project based on net present value? Which is the least desirable project based on net present value?

Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $25,840. Each project will last for 3 years and produce the following net annual cash flows. Year AA BB CC 1 $11,016 $14,348 $17,816 2 14,144 14,348 13,736 3 20,536 14,348 15,096 Total $45,696 $43,044 $46,648 The equipment's salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cash payback period over 2 years. Doug's required rate of return is 12%. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.) AA year s BB year s CC year s Which is the most desirable project? The most desirable project based on payback period is Which is the least desirable project? The least desirable project based on payback period is Compute the net present value of each project. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to the nearest whole dollar, e.g. 5,275.) AA BB CC Which is the most desirable project based on net present value? The most desirable project based on net present value is . Which is the least desirable project based on net present value? The least desirable project based on net present value is