Doug?s Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,620. Each project will last for 3 years and produce the following net annual cash flows.

Year	AA	BB	CC
1	$8,470	$12,100	$15,730
2	10,890	12,100	14,520
3	14,520	12,100	13,310
Total	$33,880	$36,300	$43,560

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 PV table. (a) Compute each project?s 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

Which is the least desirable project?

The least desirable project based on payback period is

(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

_____________

.

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

The least desirable project based on net present value is

______________

.