Which projects, if any, would you recommend funding? Briefly explain why. Transcribed Image Text: Payback and NPV methods, no income taxes. (CMA, adapted) Andrews Construction is analyzing its capital expenditure

Which projects, if any, would you recommend funding? Briefly explain why. Transcribed Image Text: Payback and NPV methods, no income taxes. (CMA, adapted) Andrews Construction is analyzing
its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is
limited to $5,000,000 for the year. Lori Bart, staff analyst at Andrews, is preparing an analysis of the three
projects under consideration by Corey Andrews, the company’s owner.
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Project A
Project B
Project C
2 Projected cash outflow
3 Net initial investment
$3,000,000
$1,500,000
$4,000,000
5 Projected cash inflows:
6 Year 1
7 Year 2
8 Year 3
Year 4
$1,000,000
1,000,000
1,000,000
1,000,000
$ 400,000
900,000
800,000
$2,000,000
2,000,000
200,000
100,000
9.
10
11 Required rate of return
10%
10%
10%

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