OOnlOnly B C D need to be answered

Sheridan 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 $172,000 $190,000 $214,000 Annual net income: Year 1 15,120 19,440 29,160 2 15.120 18,360 24,840 3 15,120 17,280 22,680 4 15,120 12,960 14,040 5 15,120 9,720 12,960 Total $75,600 $77.760 $103,680 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view the factor table. (a) Compute the cash payback period for each project. (Round answers to 2 decimal places, eg. 10.50.) Project Bono years Project Edge years Project Clayton years TABLE 1 Future Value of 1 (n) Periods 0 4% 1.00000 1.04000 1.08160 1.12486 1.16986 1.21665 1.26532 1.31593 1.36857 1.42331 1.48024 1.53945 1.60103 1.66507 1.73168 1.80094 1.87298 1.94790 2.02582 2.10685 2.19112 8 6.35 TWEE avi AWN 5% 1.00000 1.05000 1.10250 1.15763 1.21551 1.27628 1.34010 1.40710 1.47746 1.55133 1.62889 1.71034 1.79586 1.88565 1.97993 2.07893 2.18287 2.29202 2.40662 2.52695 2.65330 6% 1.00000 1.06000 1.12360 1.19102 1.26248 1.33823 1.41852 1.50363 1.59385 1.68948 1.79085 1.89830 2.01220 2.13293 2.26090 2.39656 2.54035 2.69277 2.85434 3.02560 3.20714 7% 1.00000 1.07000 1.14490 1.22504 1.31080 1.40255 1.50073 1.60578 1.71819 1.83846 1.96715 2.10485 2.25219 2.40985 2.57853 2.75903 2.95216 3.15882 3.37993 3.61653 3.86968 8% 1.00000 1.08000 1.16640 1.25971 1.36049 1.46933 1.58687 1.71382 1.85093 1.99900 2.15892 2.33164 2.51817 2.71962 2.93719 3.17217 3.42594 3.70002 3.99602 4.31570 4.66096 9% 1.00000 1.09000 1.18810 1.29503 1.41158 1.53862 1.67710 1.82804 1.99256 2.17189 2.36736 2.58043 2.81267 3.06581 3.34173 3.64248 3.97031 4.32763 4.71712 5.14166 5.60441 10% 1.00000 1.10000 1.21000 1.33100 1.46410 1.61051 1.77156 1.94872 2.14359 2.35795 2.59374 2.85312 3.13843 3.45227 3.79750 4.17725 4.59497 5.05447 5.55992 6.11591 6.72750 11% 1.00000 1.11000 1.23210 1.36763 1.51807 1.68506 1.87041 2.07616 2.30454 2.55803 2.83942 3.15176 3.49845 3.88328 4.31044 4.78459 5.31089 5.89509 6.54355 7.26334 8.06231 12% 1.00000 1.12000 1.25440 1.40493 1.57352 1.76234 1.97382 2.21068 2.47596 2.77308 3.10585 3.47855 3.89598 4.36349 4.88711 5.47357 6.13039 6.86604 7.68997 8.61276 9.64629 15% 1.00000 1.15000 1.32250 1.52088 1.74901 2.01136 2.31306 2.66002 3.05902 3.51788 4.04556 4.65239 5.35025 6.15279 7.07571 8.13706 9.35762 10.76126 12.37545 14.23177 16.36654 10 11 12 13 14 15 16 17 18 19 TABLE 2 Future Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 1.00000 1.00000 1.00000 1.0000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2 2.04000 2.05000 2.06000 2.0700 2.08000 2.09000 2.10000 2.11000 2.12000 2.15000 3 3.12160 3.15250 3.18360 3.2149 3.24640 3.27810 3.31000 3.34210 3.37440 3.47250 4 4.24646 4.31013 4.37462 4.4399 4.50611 4.57313 4.64100 4.70973 4.77933 4.99338 5 5.41632 5.52563 5.63709 5.7507 5.86660 5.98471 6.10510 6.22780 6.35285 6.74238 6 6.63298 6.80191 6.97532 7.1533 7.33592 7.52334 7.71561 7.91286 8.11519 8.75374 7 7.89829 8.14201 8.39384 8.6540 8.92280 9.20044 9.48717 9.78327 10.08901 11.06680 8 9.21423 9.54911 9.89747 10.2598 10.63663 11.02847 11.43589 11.85943 12.29969 13.72682 9 10.58280 11.02656 11.49132 11.9780 12.48756 13.02 104 13.57948 14.16397 14.77566 16.78584 10 12.00611 12.57789 13.18079 13.8164 14.48656 15.19293 15.93743 16.72201 17.54874 20.30372 11 13.48635 14.20679 14.97164 15.7836 16.64549 17.56029 18.53117 19.56143 20.65458 24.34928 12 15.02581 15.91713 16.86994 17.8885 18.97713 20.14072 21.38428 22.71319 24.13313 29.00167 13 16.62684 17.71298 18.88214 20.1406 21.49530 22.95339 24.52271 26.21164 28.02911 34.35192 14 18.29191 19.59863 21.01507 22.5505 24.21492 26.01919 27.97498 30.09492 32.39260 40.50471 15 20.02359 21.57856 23.27597 25.1290 27.15211 29.36092 31.77248 34.40536 37.27972 47.58041 16 21.82453 23.65749 25.67253 27.8881 30.32428 33.00340 35.94973 39.18995 42.75328 55.71747 17 23.69751 25.84037 28.21288 30.8402 33.75023 36.97351 40.54470 44.50084 48.88367 65.07509 18 25.64541 28.13238 30.90565 33.9990 37.45024 41.30134 45.59917 50.39593 55.74972 75.83636 19 27.67123 30.53900 33.75999 37.3790 41.44626 46.01846 51.15909 56.93949 63.43968 88.21181 20 29.77808 33.06595 36.78559 40.9955 45.76196 51.16012 57.27500 64.20283 72.05244 102.44358 TABLE 3 Present Value of 1 11% 90090 (n) Periods 1 2 3 4 5 .81162 4% .96154 .92456 .88900 .85480 .82193 .79031 .75992 .73069 .70259 .67556 .64958 .62460 .60057 .57748 .55526 .53391 .51337 49363 .47464 .45639 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 5% .95238 .90703 .86384 .82270 .78353 .74622 .71068 .67684 .64461 .61391 .58468 .55684 .53032 .50507 48102 .45811 .43630 41552 .39573 .37689 6% .94340 .89000 .83962 .79209 .74726 .70496 .66506 .62741 .59190 55839 7% 0.93458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 0.54393 0.50835 0.47509 0.44401 0.41496 0.38782 0.36245 0.33873 0.31657 0.29586 0.27615 0.25842 8% .92593 .85734 .79383 .73503 .68058 .63017 .58349 .54027 .50025 46319 .42888 .39711 .36770 .34046 .31524 .29189 27027 .25025 .23171 .21455 9% 91743 .84168 .77218 .70843 .64993 .59627 .54703 .50187 46043 .42241 .38753 .35554 .32618 .29925 .27454 .25187 .23107 .21199 .19449 .17843 10% .90909 .82645 .75132 .68301 .62092 .56447 .51316 .46651 42410 .38554 .35049 .31863 .28966 .26333 .23939 .21763 .19785 .17986 .16351 .14864 .73119 .65873 .59345 .53464 .48166 .43393 .39092 .35218 .31728 .28584 .25751 .23199 .20900 .18829 12% .89286 .79719 .71178 .63552 .56743 .50663 45235 .40388 .36061 .32197 .28748 .25668 .22917 .20462 15% .86957 .75614 .65752 .57175 .49718 .43233 .37594 .32690 .28426 .24719 .21494 .18691 .16253 .14133 .12289 .10687 .09293 .08081 .07027 .06110 ,18270 .52679 .49697 .46884 44230 .41727 .39365 .37136 .35034 .33051 .31180 .16963 .15282 .13768 .12403 .16312 .14564 .13004 .11611 .10367 TABLE4 Present Value of an Annuity of 1 (n) Payments 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 4% 5% .96154 .95238 1.88609 1.85941 2.77509 2.72325 3.62990 3.54595 4.45182 4.32948 5.24214 5.07569 6.00205 5.78637 6.73274 6.46321 7.43533 7.10782 8.11090 7.72173 8.76048 8.30641 9.38507 8.86325 9.98565 9.39357 10.56312 9.89864 11.11839 10.37966 11.65230 10.83777 12.16567 11.27407 12.65930 11.68959 13.13394 12.08532 13.59033 12.46221 6% .94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 10.10590 10.47726 10.82760 11.15812 11.46992 7% 0.93458 1.80802 2.62432 3.38721 4.10020 4.76654 5.38929 5.97130 6.51523 7.02358 7.49867 7.94269 8.35765 8.74547 9.10791 9.44665 9.76322 10.05909 10.33560 10.59401 8% .92593 1.78326 2.57710 3.31213 3.99271 4.62288 5.20637 5.74664 6.24689 6.71008 7.13896 7.53608 7.90378 8.24424 8.55948 8.85137 9.12164 9.37189 9.60360 9.81815 9% .91743 1.75911 2.53130 3.23972 3.88965 4.48592 5.03295 5.53482 5.99525 6.41766 6.80519 7.16073 7.48690 7.78615 8.06069 8.31256 8.54363 8.75563 8.95012 9.12855 10% .90909 1.73554 2.48685 3.16986 3.79079 4.35526 4.86842 5.33493 5.75902 6.14457 6.49506 6.81369 7.10336 7.36669 7.60608 7.82371 8.02155 8.2 0141 8.36492 8.51356 11% .90090 1.71252 2.44371 3.10245 3.69590 4.23054 4.71220 5.14612 5.53705 5.88923 6.20652 6.49236 6.74987 6.98187 7.19087 7.37916 7.54879 7.70162 7.83929 7.96333 12% .89286 1.69005 2.40183 3.03735 3.60478 4.11141 4.56376 4.96764 5.32825 5.65022 5.93770 6.19437 6.42355 6.62817 6.81086 6.97399 7.11963 7.24967 7.36578 7.46944 15% .86957 1.62571 2.28323 2.85498 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 5.23371 5.42062 5.58315 5.72448 5.84737 5.95424 6.04716 6.12797 6.19823 6.25933 16 17 18 19 20 Project Bono Annual Net Annual Cash Cumulative Cash Year Depreciation Income Flows Flows 0 $ -1,72,800 $ -1,72,800 1 $ 15,120 $ 34,560 $ 49,680 $ -1,23,120 2 $ 15,120$ 34,560$ 49,680$ -73,440 3 $ 15,120 $ 34,560 $ 49,680 $ -23,760 4 $ 15,120$ 34,560 $ 49,680 $ 25,920 5 $ 15,120 $ 34,560 $ 49,680 $ 75,600 Depreciation per annum = $ 172,800/5 = $ 34,560 Payback Period (having equal annual cash flows) =Initial Investment/Annual Cash Flows $ 172,800/$49,680 3.48 Years Project Edge Annual Net Annual Cash Cumulative Cash Year Depreciation Income Flows Flows 0 $ -1,89,000 $ -1,89,000 1 $ 19,440 $ 37,800 $ 57,240 $ -1,31,760 2 $ 18,360 $ 37,800 $ 56,160 $ - 75,600 3 $ 17,280 $ 37,800 $ 55,080 $ -20,520 4 $ 12,960 $ 37,800 $ 50,760 $ 30,240 5 $ 9,720 $ 37,800 $ 47,520 $ 77,760 Depreciation per annum = $ 189,000/5 = $ 37,800 Payback Period (having unequal annual cash flows) =Years before full recovery + (Unrecovered cost at the start of the year/Cash flow during the year) =3+ ($ 20,520/$ 50,760) 3.40 Years Project Clayton Annual Net Annual Cash Cumulative Cash Year Depreciation Income Flows Flows 0 $ -2,14,000 $ -2,14,000 1 $ 29,160 $ 42,800 $ 71,960 $ -1,42,040 2 $ 24,840 $ 42,800 $ 67,640 $ -74,400 3 $ 22,680 $ 42,800 $ 65,480 $ -8,920 4 $ 14,040 $ 42,800 $ 56,840 $ 47,920 5 $ 12,960 $ 42,800 $ 55,760 $ 1,03,680 Depreciation per annum = $ 214,000/5 = $ 42,800 Payback Period (having unequal annual cash flows) =Years before full recovery + (Unrecovered cost at the start of the year/Cash flow during the year) =3+($ 8,920/$ 56,840) 3.16 Years Question 4 of 4 -/3 Compute the net present value for each project. (Round answers to decimal places, eg. 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 $ $ $ e Textbook and Media Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, eg. 10,50%) Project Bono Project Edge Project Clayton Annual rate of return % % eTextbook and Media Deals the relation whenrannah Which letom -/3 Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, eg. 10.50%.) Project Bono Project Edge Project Clayton Annual rate of return % % eTextbook and Media 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