P$5\mathrm{.}27$A $($LO $1,2,5)$ An icon reads, Excel. The Three Stages partnership is considering three long$-$term capital investment proposals. Each investment has a useful life of five years. Relevant data on each project are as follows:

Project Main

Project Odyssey

Project Duo

Capital investment:

$$150,000$

$$160,000$

$$200,000$

Annual net income:

Year $1$

$$13,000$

$$18,000$

$$27,000$

$2$

$13,000$

$17,000$

$22,000$

$3$

$13,000$

$16,000$

$21,000$

$4$

$13,000$

$12,000$

$13,000$

$5$

$13,000$

$9,000$

$12,000$

Total

$$65,000$

$$72,000$

$$95,000$

Depreciation is calculated by the straight$-$line method and there is no salvage value. The company$$s cost of capital is $15\%.($Use average net annual cash flows in your calculations.$)$

Instructions

Calculate the cash payback period for each project. $($Round to two decimals.$)$

Calculate the net present value for each project. $($Round to the nearest dollar.$)$

b$.$ Main: $$(5,857)$

Calculate the annual rate of return for each project. $($Round to two decimals.$)$

Rank the projects based on each of your answers for parts $($a$),($b$),$ and $($c$).$ Which project do you recommend?