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Ivanhoe Corporation is reviewing an investment proposal. The initial cost is $105.100. Estimates of the book value of the investment at the end of each

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Ivanhoe Corporation is reviewing an investment proposal. The initial cost is $105.100. 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 following schedule. 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 assumed to equal its book value. There would be no salvage value at the end of the investment's life. Investment Proposal Book Annual Value Cash Flows $69,600 $44.000 Year Annual Net Income $8,500 1 2 41.900 39,500 11,800 3 21,600 36,000 15.700 4 8,300 17.700 31,000 22,915 5 0 14,615 Ivanhoe Corporation uses an 11% target rate of return for new investment proposals. Click here to view the factor table. (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 % 2 41.900 11,800 39,500 36,000 3 21,600 15,700 17,700 4 8,300 31,000 5 0 22,915 14,615 Ivanhoe Corporation uses an 11% target rate of return for new investment proposals. Click here to view the factor table. (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 e.g. -45 or parentheses es (45). Round answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value $

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