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 the factor 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

select a project

Which is the least desirable project?

The least desirable project based on payback period is

select a 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?

The most desirable project based on net present value is select a project

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

The least desirable project based on net present value is select a project Project CCProject AAProject BB.