MCA Corporation is reviewing an investment proposal. The schedule below presents the initial cost and 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. All cash flows are assumed to take place at the end of the year. The investments salvage value at the end of each year is equal to its book value. There would be no salvage value at the end of the investments life.

Investment Proposal
Year		Initial Cost and Book Value			Annual Cash Flows			Annual Net Income
0		$104,600
1		70,900			$50,600			$15,400
2		41,200			45,200			17,000
3		21,200			39,300			18,700
4		7,800			34,700			21,800
5		0			29,000			22,300

MCA Corporation uses a 15% target rate of return for new investment proposals.

(a)

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What is the cash payback period for this proposal? (Round answer to 2 decimal places, e.g. 12.52.)

Cash payback period

years

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(b)

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What is the annual rate of return for the investment? (Round answer to 2 decimal places, e.g. 12.52%.)

Annual rate of return

%

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(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 e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) Click here to view PV table.

Net present value

$