ACCOUNTING EXPERT TODAY 12-2 a

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Exercise 12-2 (Part Level Submission) Doug’s Custom Construction Company is considering three new projects, each requiring an equipment investment of $28,160. Each project will last for 3 years and produce the following net annual cash flows. Year 1 2 3 AA BB CC $8,960 $12,800 $16,640 11,520 12,800 15,360 15,360 12,800 14,080 Total $35,840 $38,400 $46,080 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%. (Refer the below table) (a) Compute each project’s 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 Click if you would like to Show Work for this question: Open Show Work SAVE Attempts: 0 of 5 used FOR LATER SUBMIT ANSWER (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
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