Concord 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

Capital investment

$168,000 $183,750 $202,000

Annual net income:

Year 1

14,700 18,900 28,350

2

14,700 17,850 24,150

3

14,700 16,800 22,050

4

14,700 12,600 13,650

5

14,700 9,450 12,600

Total

$73,500 $75,600 $100,800

Depreciation is computed by the straight-line method with no salvage value. The companys cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)

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Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)

Project Bono

enter your answer rounded to 2 decimal places years

Project Edge

enter your answer rounded to 2 decimal places years

Project Clayton

enter your answer rounded to 2 decimal places years

eTextbook and Media

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

Net present value

$enter your answer in dollars rounded to 0 decimal places $enter your answer in dollars rounded to 0 decimal places $enter your answer in dollars rounded to 0 decimal places

eTextbook and Media

Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, e.g. 10.50%.)

Project Bono Project Edge Project Clayton

Annual rate of return

enter your answer in percentages rounded to 2 decimal places % enter your answer in percentages rounded to 2 decimal places % enter your answer in percentages rounded to 2 decimal places %

eTextbook and Media

Rank the projects on each of the foregoing bases. Which project do you recommend?

Project Cash Payback Net

Present Value Annual

Rate of Return

Bono

select a rank

select a rank

select a rank

Edge

select a rank

select a rank

select a rank

Clayton

select a rank

select a rank

select a rank

The best project is select a project

.