Drake Corporation is reviewing an investment proposal. The initial cost is $106,200. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There would be no salvage value at the end of the investment's life. Investment Proposal Annual Year Book Value Cash Flows Annual Net Income 1 $69,500 $45,200 $8,500 2 41,700 39,400 11,600 3 20,800 36,000 15,100 4 6,400 29,000 14,600 0 25,630 19,230 Drake Corporation uses an 11% target rate of return for new investment proposals. Click here to view the factor table.