Concords Custom Construction Company is considering three new projects, each requiring an equipment investment of $22,880. Each project will last for 3 years and produce the following net annual cash flows.

Year		AA		BB		CC
1		$7,280		$10,400		$13,520
2		9,360		10,400		12,480
3		12,480		10,400		11,440
Total		$29,120		$31,200		$37,440

The equipments salvage value is zero, and Concord uses straight-line depreciation. Concord will not accept any project with a cash payback period over 2 years. Concords required rate of return is 12%. Click here to view PV table. (a) Compute each projects payback period. (Round answers to 2 decimal places, e.g. 15.25.)

AA			years
BB			years
CC			years

Which is the most desirable project?

The most desirable project based on payback period is

Project AA/Project BB/Project CC

Which is the least desirable project?

The least desirable project based on payback period is

Project BB/Project AA/Project CC

(b) 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 final answers to the nearest whole dollar, e.g. 5,275. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

AA
BB
CC

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

The most desirable project based on net present value is Project CC/Project BB/Project AA .

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

The least desirable project based on net present value is

Project CC/Project AA/Project BB

.