Drake Corporation is reviewing an investment proposal. The initial cost and 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 equal to its book value. There would be no salvage value at the end of the investments life.

Year Investment Proposal Year

Initial Cost and Book Value Annual Cash Flows Annual Net Income

0 $104,100

1 69,900 $44,700 $10,500

2 41,600 40,700 12,400

3 20,900 35,000 14,300

4 7,800 29,100 16,000

5 0 25,800 18,000

Drake Corporation uses an 11% target rate of return for new investment proposals.

(a) What is the cash payback period for this proposal? Cash payback period years ?

(b) What is the annual rate of return for the investment? Annual rate of return for the investment % ?

(c) What is the net present value of the investment? Net present value ?