Crane's Custom Construction Company is considering three new projects, each requiring an equipment investment of $27,280. Each project will last for 3 years and produce the following net annual cash flows. Year 1 2 (a) 3 AA AA $8,680 BB 11,160 CC 14,880 Total $34,720 $37,200 BB $12,400 $16,120 12,400 12,400 The equipment's salvage value is zero, and Crane uses straight-line depreciation. Crane will not accept any project with a cash payback period over 2 years. Crane's required rate of return is 12%. Click here to view PV table. CC Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.) Which is the most desirable project? 14,880 13,640 Which is the least desirable project? $44,640 years years years The most desirable project based on payback period is The least desirable project based on payback period is

Crane's Custom Construction Company is considering three new projects, each requiring an equipment investment of $27,280. Each project will last for 3 years and produce the following net annual cash flows. Year 1 2 (a) 3 AA AA $8,680 BB 11,160 CC 14,880 Total $34,720 $37,200 BB $12,400 $16,120 12,400 12,400 The equipment's salvage value is zero, and Crane uses straight-line depreciation. Crane will not accept any project with a cash payback period over 2 years. Crane's required rate of return is 12%. Click here to view PV table. CC Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.) Which is the most desirable project? 14,880 13,640 Which is the least desirable project? $44,640 years years years The most desirable project based on payback period is The least desirable project based on payback period is

Name: Subject: acounting (b)WCompute the net present value of each project.
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Description: Subject: acounting (b)WCompute 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 calculat

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 13P

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