If someone could help me I am stumped. I have the cash payback period figured out but can not get the rest.

U3 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 Project Edge Project Clayton

Capital investment $164,800 $180,250 $204,000 Annual net income:

Year 1 14,420 18,540 27,810

2 14,420 17,510 23,690

3 14,420 16,480 21,630

4 14,420 12,360 13,390

5 14,420 9,270 12,360

Total $72,100 $74,160 $98,880

Depreciation is computed by the straight-line method with no salvage value. The companys cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)

Click here to view PV table.

Click here to view PV of Annuity table.

Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)

Project Bono 2.2 9years

Project Edge 2.43 years

Project Clayton 2.06 years

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

Project Bono

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 % % %

Rank the projects on each of the foregoing bases. Which project do you recommend?

Project Cash Payback Net Present Value Annual Rate of Return

Bono

Edge

Clayton

The best project is .