Dougs Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,320. Each project will last for 3 years and produce the following net annual cash flows.

Year		AA		BB		CC
1		$7,420		$10,600		$13,780
2		9,540		10,600		12,720
3		12,720		10,600		11,660
Total		$29,680		$31,800		$38,160

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		Enter a number of years rounded to 2 decimal places	years
BB		Enter a number of years rounded to 2 decimal places	years
CC		Enter a number of years rounded to 2 decimal places	years

Which is the most desirable project?

The most desirable project based on payback period is

select a project Project AAProject BBProject CC

Which is the least desirable project?

The least desirable project based on payback period is