4 BACK NEXT CES Problem 27-01A (Video) U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton on) Capital investment $163,200 $178,500 $202,000 Annual net income: on) Year 1 14,280 18,360 27,540 2 14,280 17,340 23,460 14,280 16,320 21,420 deo) 4 14,280 12,240 13,260 14,280 9,180 12,240 tudy Total $71,400 $73,440 $97,920 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view PV table. Your answer is correct. hsi Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Re 3.48 years Project Bono Project Edge 3.4 years hsic Rel 3.16 years Project Clayton SHOW ANSWER SHOW SOLUTION g th LINK TO TEXT LINK TO TEXT LINK TO TEXT elev Weygandt, Accounting Principles, 13e Help System Announcements CALCULATOR PRINTER VERSION BACK LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Project Bono Project Edge Project Clayton 2824 2,865 Net present value 6207 SHOW SOLUTION UNK TO TXT LINK TO TEXT LINK TO TEXT Your answer is correct. Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answe to 2 decimal pla ces, e.g. 10.50%.) Project Clayton Project Edge Project Bono 19.39 J% 16.46 J% 17.52 Annual rate of return hsid Rele SHOW ANSWER SHOW SOLUTION LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Rank the projects on each of the foregoing bases. Which project do you recommend? Net Present Value Annual Rate of Return Project Cash Payback Bono 3 3 : Edge 2 3 2 Clayton 1 1 # 1 4 The best project is Clayton VIDEO: SIMILAR PROBLE LINK TO TEXT LINK TO TEXT LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy SAVE FOR LATER Question Attempts: 2 of 3 used