Part B please Monty Manufacturing Company is considering three new projects, each requiring an equipment investment of $25,200. Each project will last for 3 years and produce the following cash flows.Year123TotalAA(a)10,000$8,000 $10,900 $12,00011,00016,000BB$34,000 $32,70010,900Click here to view PV tables.10,900Payback periodThe salvage value for each of the projects is zero. Monty uses straight-line depreciation. Monty will not accept any project with a payback period over 2.2 years. Monty's minimum required rate of return is 12%.Most desirableLeast desirableCCYour answer has been saved. See score details after the due date.Compute each project's payback period. (Round answers to 2 decimal places, e.g. 52.75.)10,000$33,000Project CCProject AAAAIndicating the most desirable project and the least desirable project using this method.2.72 yearsBB2.31 yearsCC2.20 yearsAttempts: 1 of 1 used (b)Compute the net present value of each project. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.)Net present value $Most desirableLeast desirableIndicating the most desirable project and the least desirable project using this method.Save for LaterAAProject CCProject AAProject BB$BBCCAttempts: 0 of 1 usedSubmit Answer

concept. Net present value is calculated by deducting initial investment from present value of cash…

Answered: Part B please

Business

Finance

Part B please

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

Part B please

Monty Manufacturing Company is considering three new projects, each requiring an equipment investment of $25,200. Each project will last for 3 years and produce the following cash flows.
Year
1
2
3
Total
AA
(a)
10,000
$8,000 $10,900 $12,000
11,000
16,000
BB
$34,000 $32,700
10,900
Click here to view PV tables.
10,900
Payback period
The salvage value for each of the projects is zero. Monty uses straight-line depreciation. Monty will not accept any project with a payback period over 2.2 years. Monty's minimum required rate of return is 12%.
Most desirable
Least desirable
CC
Your answer has been saved. See score details after the due date.
Compute each project's payback period. (Round answers to 2 decimal places, e.g. 52.75.)
10,000
$33,000
Project CC
Project AA
AA
Indicating the most desirable project and the least desirable project using this method.
2.72 years
BB
2.31 years
CC
2.20 years
Attempts: 1 of 1 used

(b)
Compute the net present value of each project. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.)
Net present value $
Most desirable
Least desirable
Indicating the most desirable project and the least desirable project using this method.
Save for Later
AA
Project CC
Project AA
Project BB
$
BB
CC
Attempts: 0 of 1 used
Submit Answer

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