Dougs Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,540. Each project will last for 3 years and produce the following net annual cash flows.

Year		AA		BB		CC
1		$7,490		$10,700		$13,910
2		Unresolved		10,700		12,840
3		12,840		10,700		11,770
Total		$29,960		$32,100		$38,520

The equipments salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cash payback period over 2 years. Dougs 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?

Which is the least desirable project?

(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?

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