M11-4 Calculating Accounting Rate of Return, Payback Period [LO 11-1, 11-2] Blue Marlin Company is considering the purchase of new equipment for its factory. It will cost $249,000 and have a $49,800 salvage value in five years. The annual net income from the equipment is expected to be $27,390, and depreciation is $39,840 per year. Calculate Blue Marlin's annual rate of return and payback period for the equipment. (Do not round intermediate calculations. Round your Payback Period to 2 decimal places.) Annual Rate of Return Payback Period Years E11-12 Ranking Capital Investment Projects Using Different Criteria [LO 11-2, 11-3, 11-5, 11-6] Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projects follow: Initial investment Annual cash inflows PV of cash inflows Project X $40,000 25,000 45,000 Project Y $20,000 10,000 33,000 Project Z $50,000 25,400 70,000 Required: 1. Compute the payback period for each project and rank order them based on this criterion. (Round your answers to 2 decimal places.) Payback Period Rank Project X Project Y Project Z 2. Compute the NPV of each project and rank order them based on this criterion. NPV Rank Project X Project Y 3. Compute the profitability index of each project and rank order them based on this criterion. (Round your answers to 2 decimal places.) PI Rank Project X Project Y Project Z I 4. If Jennings has limited funds to invest, which ranking should Jill recommend? O NPV Ranking O Payback Ranking O Profitability Index Ranking