SEE ATTACHED SCREENSHOTS

U3 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	$164,800	$180,250	$208,000
Annual net income:
Year 1	14,420	18,540	27,810
2	14,420	17,510	23,690
3	14,420	16,480	21,630
4	14,420	12,360	13,390
5	14,420	9,270	12,360
Total	$72,100	$74,160	$98,880

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 PV table. (See screenshot)

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

Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, e.g. 10.50.)

Project Bono	Project Edge	Project Clayton
Annual rate of return	%	%	%

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

.__________________