Exercise 24-2 Doug\'s Custom Construction Company is considering three new proje
ID: 2437827 • Letter: E
Question
Exercise 24-2 Doug's Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,980. Each project will last for 3 years and produce the following net annual cash flows esa @x: 1 $7,30 $10,900 14,170 2 9,810 10,900 13,080 3 13,080 10,900 11,990 Total $30,520 $32,700 $39,240 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 PV table, Compute each project's payback period. (Round answers to 2 decimal places, e.g. 15.25.) years years years Which is the most desirable project? The most desirable project based on payback period isExplanation / Answer
Most Desirable project is CC
Least Desirable Project AA
2
Most Desirable project is CC
Least Desirable Project AA
Payback AA 2.50 Years BB 2.20 Years CC 1.75 YearsRelated Questions
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