Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $ 22,660. Eachproject will last for 3 years and produce the following net annual cash flows.YearAABBCC1$7,210$ 10,300$ 13,3909,27010,30012,360312,36010,30011,330Total$ 28,840$ 30,900$ 37,080The equipment's salvage value is zero, and Doug uses straight-line depreciation. Doug will not accept any project with a cashpayback period over 2 years. Doug's required rate of return is 12%. Click here to view the factor table.(a)Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.)AAyearsBByearsCCyearsWhich is the most desirable project?The most desirable project based on payback period isWhich 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 orparentheses e.g. (45). Round final answers to the nearest whole dollar, e.g. 5,275. For calculation purposes, use 5 decimal places as displayedin the factor table provided.)AABBCCWhich is the most desirable project based on net present value?The most desirable project based on net present value isWhich is the least desirable project based on net present value?The least desirable project based on net present value is

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Description: Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $ 22,660. Eachproject will last for 3 years and produce the following net annual cash flows.YearAABBCC1$7,210$ 10,300$ 13,3909,27010,3001

a. Computation of Cumulative Cash flows Period AA BB CC Cash inflows Cumulative Cash Inflows…

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Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $ 22,66 project will last for 3 years and produce the following net annual cash flows. Year AA BB $ 7,210 $ 10,300 $ 13,390 1 2 9,270 10,300 12,360 12,360 10,300 11,330 $ 28,840 $ 30,900 $ 37,080 Total 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 the factor table. 3.

Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $ 22,66 project will last for 3 years and produce the following net annual cash flows. Year AA BB $ 7,210 $ 10,300 $ 13,390 1 2 9,270 10,300 12,360 12,360 10,300 11,330 $ 28,840 $ 30,900 $ 37,080 Total 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 the factor table. 3.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 17P

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