Cepeda Manufacturing Company is considering three new projects, each requiring an equipment investment of $20,000. Each project will last for 3 years and produce the following cash inflows. 
The equipment's salvage value is zero. Cepeda uses straight-line depreciation. Cepeda will not accept any project with a payback period over 2 years. Cepeda's minimum required rate of return is 12%.
Instructions
(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.)
Definitions:
Dissociative Disorder
A mental health condition marked by a disconnection and lack of continuity between thoughts, memories, surroundings, actions, and identity.
Bulimia Nervosa
An eating disorder marked by episodes of binge eating followed by inappropriate methods of weight control, such as vomiting.
Schizotypal Personality Disorder
A mental health condition characterized by severe social anxiety, thought disorder, paranoid ideation, derealization, unusual perceptions, and odd behaviors.
Auditory Hallucinations
Experiencing the perception of sound, such as voices, music, or noises, in the absence of an external auditory stimulus.
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