National Textile Manufacturing Company is considering three new projects, each requiring an equipment investment of $22,000. Each project will last for 3 years and produce the following cash inflows. 25 minutes Year AA BB CC 1 $ 7,000 $ 9,500 $11,000 2 9,000 9,500 10,000 3 15,000 9,500 9,000 Total $31,000 $28,500 $30,000 The equipment's salvage value is zero. The company uses straight-line depreciation; does not accept any project with a payback period over 2 years; and, has a minimum required rate of return of 12%. (a) Compute each project's payback period, indicating the most desirable project and the least desirable project using this method. (Round to two decimals.) (b) Compute the net present value of each project. Does your evaluation change? (Round to nearest dollar.) Please type in word
National Textile Manufacturing Company is considering three new projects, each requiring an equipment investment of $22,000. Each project will last for 3 years and produce the following
Year AA BB CC
1 $ 7,000 $ 9,500 $11,000
2 9,000 9,500 10,000
3 15,000 9,500 9,000
Total $31,000 $28,500 $30,000
The equipment's salvage value is zero. The company uses straight-line
(a) Compute each project's payback period, indicating the most desirable project and the least desirable project using this method. (Round to two decimals.)
(b) Compute the
Please type in word
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