Problems: Set B 1 PROBLEMS: SET B P12-13 The Borders and Noble partnership is considering three long-term capital invest ment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Compute annual rate of returi, cash payback, and net present value (LO 1, 2, 5), AN Project Mary $140,000 Project Winnie $175,000 Project Sarah $190,000 XLS Capital investment Annual net income: Year 1 $10,000 10,000 10,000 10,000 10,000 $50,000 $12,500 12,000 11,000 8,000 6,000 $49,500 $19,000 16,000 14,000 9,000 8,000 1$ 66,000 Total Depreciation is computed by the straight-line method with no salvage value. The compa- ny's cost of capital is 12%. (Assume cash flows occur evenly throughout the year) Instructions (a) Compute the cash payback period for each project. (Round to two decimals.) (b) Compute the net present value for each project. (Round to nearest dollar) (c) Compute the annual rate of return for each project. (Round to two decimals.) (Hint: Use average annual net income in your computation) (d) Rank the projects on each of the foregoing bases. Which project do you recommend? (b) M 5(3,018): 55(3,075)