Sunland's Custom Construction Company is considering three new projects, each requiring an equipment investment of $26,180. Each project will last for 3 years and produce the following net annual cash flows.

Year	AA	BB	CC
1	$8,330	$11,900	$15,470
2	$10,710	$11,900	$14,280
3	$14,280	$11,900	$13,090
Total	$33,320	$35,700	$42,840

The equipments salvage value is zero, and Sunland uses straight-line depreciation. Sunland will not accept any project with a cash payback period over 2 years. Sunlands required rate of return is 12%.

Click here to view PV table. (Posted info below)

https://education.wiley.com/content/Kimmel_Survey_Of_Accounting_2e/media/simulations/hidden_appE_tables/bappE_Tables.pdf

Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15%

0 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000

1 1.04000 1.05000 1.06000 1.07000 1.08000 1.09000 1.10000 1.11000 1.12000 1.15000

2 1.08160 1.10250 1.12360 1.14490 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250

3 1.12486 1.15763 1.19102 1.22504 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088

4 1.16986 1.21551 1.26248 1.31080 1.36049 1.41158 1.46410 1.51807 1.57352 1.74901

5 1.21665 1.27628 1.33823 1.40255 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136

(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 ___________

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 ______.