Dougs custom construction company is considering three new projects, each requiring an equipment investment of $25,300.Each project will last for 3years and priduce thr following net annual cash flows

the equipment 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%.

compute each projects payback period (Round answers to 2 decimal places)

AA_________years

BB_________years

CC_________years

Which is the most desirable project?

The most desirable project based oj payback period is

Project AA, Project BB or Project CC?

Which is the least desirable project?

Project Bb, Project AA or Project CC?

b.

Compute the net present value of each project.

AA________

BB________

CC________

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

The most desirable project based on net value is?

Project CC, Project AA or Project BB?

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

The least desirable project based on net present value is?

Project AA, Project BB or Project CC?

Year AA BB CC

1 $8,050 $11,500 $14,950

2 $10,350 $11,500 $13,800

3 $13,800 $11,500 $12,650

Totals $32,200 $34,500 $41,400