Questions:

a) Compute the annual rate of return for each project

b) 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

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.) (a) Your answer is correct. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono years Project Edge years Project Clayton years Attempts: 1 of 1 used (b) Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 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.)