Exercise 24-11 3 questions for this problem- please give detail answer

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.

Investment Proposal
Year	Initial Cost and Book Value	Annual Cash Flows	Annual Net Income
0	$104,500
1	69,300	$45,900	$10,700
2	42,100	40,300	13,100
3	21,100	35,000	14,000
4	7,700	30,800	17,400
5	0	25,600	17,900

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

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(a)

What is the cash payback period for this proposal? (Round answer to 2 decimal places, e.g. 10.50.)

Cash payback period

years

(b)

What is the annual rate of return for the investment? (Round answer to 2 decimal places, e.g. 10.50.)

Annual rate of return for the investment

%

(c)

What is the net present value of the investment? (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Net present value

$

Table3Present Value of 1 (n) 4% 5% Periods 1 0.96154 0.95238 2 0.92456 0.90703 3 0.889 0.86384 4 0.8548 0.8227 5 0.82193 0.78353 6 0.79031 0.74622 7 0.75992 0.71068 8 0.73069 0.67684 9 0.70259 0.64461 10 0.67556 0.61391 11 0.64958 0.58468 12 0.6246 0.55684 13 0.60057 0.53032 14 0.57748 0.50507 15 0.55526 0.48102 16 0.53391 0.45811 17 0.51337 0.4363 18 0.49363 0.41552 19 0.47464 0.39573 20 0.45639 0.37689 6% 7% 8% 9% 10% 11% 12% 0.9434 0.89 0.83962 0.79209 0.74726 0.70496 0.66506 0.62741 0.5919 0.55839 0.52679 0.49697 0.46884 0.4423 0.41727 0.39365 0.37136 0.35034 0.33051 0.3118 0.93458 0.87344 0.8163 0.7629 0.71299 0.66634 0.62275 0.58201 0.54393 0.50835 0.47509 0.44401 0.41496 0.38782 0.36245 0.33873 0.31657 0.29586 0.27615 0.25842 0.92593 0.85734 0.79383 0.73503 0.68058 0.63017 0.58349 0.54027 0.50025 0.46319 0.42888 0.39711 0.3677 0.34046 0.31524 0.29189 0.27027 0.25025 0.23171 0.21455 0.91743 0.84168 0.77218 0.70843 0.64993 0.59627 0.54703 0.50187 0.46043 0.42241 0.38753 0.35554 0.32618 0.29925 0.27454 0.25187 0.23107 0.21199 0.19449 0.17843 0.90909 0.82645 0.75132 0.68301 0.62092 0.56447 0.51316 0.46651 0.4241 0.38554 0.35049 0.31863 0.28966 0.26333 0.23939 0.21763 0.19785 0.17986 0.16351 0.14864 0.9009 0.81162 0.73119 0.65873 0.59345 0.53464 0.48166 0.43393 0.39092 0.35218 0.31728 0.28584 0.25751 0.23199 0.209 0.18829 0.16963 0.15282 0.13768 0.12403 0.89286 0.79719 0.71178 0.63552 0.56743 0.50663 0.45235 0.40388 0.36061 0.32197 0.28748 0.25668 0.22917 0.20462 0.1827 0.16312 0.14564 0.13004 0.11611 0.10367 7% 8% 9% 10% 11% 12% .93458 1.80802 2.62432 3.38721 4.10020 4.76654 5.38929 5.97130 6.51523 7.02358 7.49867 7.94269 8.35765 8.74547 9.10791 9.44665 9.76322 10.05909 .92593 1.78326 2.5771 3.31213 3.99271 4.62288 5.20637 5.74664 6.24689 6.71008 7.13896 7.53608 7.90378 8.24424 8.55948 8.85137 9.12164 9.37189 .91743 1.75911 2.5313 3.23972 3.88965 4.48592 5.03295 5.53482 5.99525 6.41766 6.80519 7.16073 7.4869 7.78615 8.06069 8.31256 8.54363 8.75563 .90909 1.73554 2.48685 3.16986 3.79079 4.35526 4.86842 5.33493 5.75902 6.14457 6.49506 6.81369 7.10336 7.36669 7.60608 7.82371 8.02155 8.20141 .90090 1.71252 2.44371 3.10245 3.6959 4.23054 4.7122 5.14612 5.53705 5.88923 6.20652 6.49236 6.74987 6.98187 7.19087 7.37916 7.54879 7.70162 .89286 1.69005 2.40183 3.03735 3.60478 4.11141 4.56376 4.96764 5.32825 5.65022 5.9377 6.19437 6.42355 6.62817 6.81086 6.97399 7.11963 7.24967 Table4Present Value of an Annuity of 1 (n) 4% 5% 6% Payments 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 .96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 8.76048 9.38507 9.98565 10.56312 11.11839 11.6523 12.16567 12.6593 .95238 1.85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 8.30641 8.86325 9.39357 9.89864 10.37966 10.83777 11.27407 11.68959 .94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 10.1059 10.47726 10.8276 19 20 13.13394 12.08532 11.15812 10.3356 9.6036 13.59033 12.46221 11.46992 10.59401 9.81815 8.95012 9.12855 8.36492 8.51356 7.83929 7.96333 7.36578 7.46944 15% 0.86957 0.75614 0.65752 0.57175 0.49718 0.43233 0.37594 0.3269 0.28426 0.24719 0.21494 0.18691 0.16253 0.14133 0.12289 0.10687 0.09293 0.08081 0.07027 0.0611 15% .86957 1.62571 2.28323 2.85498 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 5.23371 5.42062 5.58315 5.72448 5.84737 5.95424 6.04716 6.12797 6.19823 6.25933