Managerial Accounting Sp22 (McGlynn 40789) Time left 2:29:15 Capital Budgeting (10 points) The Sports Complex is considering an investment proposal. The initial cost of the investment, the net cash flows for each year, and the net income for each year are presented below. There is no salvage value at the end of the investment's life. Year 0 Initial Cost $135,000 Annual Cash Flow Annual Net Income 2 $36,000 $16,000 2 38,000 18,000 3 50,000 20,000 4 52,000 22,000 5 54,000 24,000 The Sports Complex uses a 16% target rate of return for new investment proposals. Answer the questions in the text box below and Show your work. Note: the Present Value Tables are provided below this question (scroll down). DOD 80 600 F4 13 0 MacBook Air 44 711 in the text box below and Show your work. Note: the Present Value Tables are provided below this question (scroll down). A- B I 1) What is the cash payback period for this proposal? (2 pts) 2) What is the average annual net income for this investment? (1 pt) 3) What is the annual rate of return for this investment? (2 pts) 4) What is the net present value of this investment? (4 pts) Year Amount Factor Time left 2:29:09 Present Value Total 5) What is your recommendation to Bandon Company regarding this investment? (1pt) GOD 20 000 14 23 22 1000 # S S 4 2 % C MacBook Air 44 & 87 7 F7 -11 C