Chris\'s Custom Manufacturing Company is considering three new projects, each re

Question

Chris's Custom Manufacturing Company is considering three new projects, each requiring an equipment investment of $24,948. Each project will last for 3 years and produce the following net annual cash flows. Year AA BB CC 1 $8,748 $11,394 $14,148 2 11,232 11,394 10,908 3 16,308 11,394 11,988 Total $36,288 $34,182 $37,044 The equipment's salvage value is zero, and Chris uses straight-line depreciation. Chris will not accept any project with a cash payback period over 2 years. Chris's required rate of return is 12%. Compute each project's payback period, indicating the most desirable project and the least desirable project using this method Compute the net present value of each project.

Explanation / Answer

only third project has cash payback period of 2 years

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.