Flounder 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.

Problem 16-1 Flounder 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 $163,200 Project Edge $178,500 Project Clayton $204,000 Capital investment Annual net income: Year 1 2 3 14,280 14,280 14,280 14,280 14,280 $71,400 18,360 17,340 16,320 12,240 9,180 $73,440 27,540 23,460 21,420 13,260 12,240 $97.920 4 5 Total 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 evely throughout the year.) Click here to view PV table. Compute the cash payback period for each project. (Round answers to 2 decimal places, c.9. 10.50.) Project Bono years Project Edge years Project Clayton years Project Bono ore provided Project Edge Project Clayton Net present value $ $ 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 96 Rank the projects on each of the foregoing bases. Which project do you recommend? Project Cash Payback Bono Net Present Value Annual Rate of Return Edge Clayton The best orolectis