HOLUL LALEI WUIASreet ome Insert Page Layout Formulas Data Review View Liberation Sans 12 A A = = = P . Currency Conditional F Formatting a Subscription Required to edit and Save Start your free one month trial of Microsoft 366 or Sign in to activate an existing subscription ? U3 Company is considering three long-term capital investment proposals. Each investment has a useful life 5 years. Relevant data on each project are as follows. Project Bong $160,000 Project Edge $175,000 Project Clayton $200,000 Capital investment Annual net income: Year 14,000 14,000 14,000 14,000 14,000 $70,000 18,000 17,000 16,000 12.000 9,000 $72,000 27,000 23,000 21,000 13,000 12,000 $96,000 Total epreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. assume that cash flows occur evenly throughout the year.) structions Compute the cash payback period for each project. (Round to two decimals.) Compute the net present value for each project. (Round to nearest dollar) > Compute the annual rate of return for each project. (Round to two decimals.) (Hint: Use average annual net income in your computation) Rank the projects on each of the foregoing bases. Which project do you recommend? TE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "? E I I B $ % 9 8 99 Conditional Format Formatting as Table Cell Styles Subscription Required to edit and Save Start your free one month trial of Microsoft 365 or sign in to activate an existing subscription GECU , music WRC Project Bong Value Net income Depreciation Annual net cash flows Investment Annual net cash flows Payback period in years Value Value Project Edge Net Net Annual Cumulative Cash Flow Net Cash Flow 77 Income $18,000 17,000 16,000 12,000 9,000 Annual Depreciation $35,000 $35,000 $35,000 $35,000 $35.000 77 ? ? 7 7 Cash Payback Period: Capital investment Cumulative cash flow, year 3 Remaining cost to be recovered (a) Net cash flow, year 4 (b) Payback period, year 4 (a) + (b) Total cash payback period in years Value 2 7 Value ? Liberation Sans 12 A A = = BIUL A EES Currency $ % DU 2.3 Conditional Format Formatting as Table Ce Styl bscription Required to Edit and Save Start your free one month trial of Microsoft 366 or sign in to activate an existing subscription Project Clayton Net Annual Depreciation Cumulative Net Cash Flow Year Income ? 2 ? ? ? Net Annual Cash Flow 2 ? 7 ? | + Value Cash Payback Period: Capital investment Cumulative cash flow, year 3 Remaining cost to be recovered (a) Net cash flow, year 4 (b) Cash payback period, year 4 (a) (b) Total cash payback period in years ? Value Value Value Present Value Years 15% PV Factor 3.35216 Project Bono Item Net annual cash flows Capital investment Negative net present value Amount Value Value Conditional Format 12 - Currency Pastes BIDE A E E 33 D $ % 9 Subscription Required to edit and Save Start your free one month trial of Microsoft 365 or Sign in to activate an existing subscription F37 ? Cell 70 ) Project Bono Present Amount Years 15% PV Factor 3.35216 Value Value Net annual cash lows Capital Investment Negative net present value Value Project Edge Present Year ON-2 15% Discount Factor 0.86957 0.75614 0.65752 0.57175 0.49718 Project Clayton Cash Present Value Value Value Cash Flow Value Value Value Value Value Value Value Value Value 84 As 85 Total Capital Investment Net present value Value 90 (c) Project Bono Value Project Edge Value Project Clayton Value Average net income over 5 years Original Investment Value at end of useful Average investment Value Value Value Value Value Value 77 Value V alue Average net income (a) Average investment (b) Annual rate of return (a) (b) Iss DIE IIIIIII LLL 51 Test Problem P24-1A Test Problem P25-2A Test Problem 26-1A Ready Test 3.ch23-26-ACC202. Excel Worksheet Home Insert Page Layout Formulas Data Review View 12 C Liberation Sans BIDE AA EEE P E S 33 urrency $ % A D 9 .18 Formatting as Table Styles Conditional Format Cell Forma Subscription Required to edit and Save Start your free one month trial of Microsoft 365 or sign in to activate ting subscription F37 103 (d) Rate of Retu Cash Payback Value Value Present Val Valus Bono Edge Clayton 305 Value 100 Value 100 Response 110 114 125 Test Problem P26-1A Test Problem P24-1A Test Problem P25-2A