Business, 24.03.2021 19:20 arivalen

Bramble’s Custom Construction Company is considering three new projects, each requiring an equipment investment of $27,500. Each project will last for 3 years and produce the following net annual cash flows ear AA BB CC
1 $8,750 $12,500 $16,250
2 11,250 12,500 15,000
3 15,000 12,500 13,750
Total $35,000 $37,500 $45,000

The equipment’s salvage value is zero, and Bramble uses straight-line depreciation. Bramble will not accept any project with a cash payback period over 2 years. Bramble’s required rate of return is 12%.

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