Sheridan Corporation is reviewing an investment proposal. The initial cost is $105,600. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There would be no salvage value at the end of the investments life. Investment Proposal Year Book Value Annual Cash Flows Annual Net Income 1 $69,400 $44,300 $8,100 2 42,600 39,700 12,900 3 20,500 36,000 13,900 4 8,800 30,300 18,600 5 0 23,940 15,140 Sheridan Corporation uses an 11% target rate of return for new investment proposals. Investment Proposal Year Book Value Annual Cash Flows Annual Net Income 1 $69,400 $44,300 $8,100 2 42,600 39,700 12,900 3 20,500 36,000 13,900 4 8,800 30,300 18,600 5 0 23,940 15,140 Sheridan Corporation uses an 11% target rate of return for new investment proposals.

a) what is the cash payback for this proposal?

b) what is the annual rate of return for the investment?

c) what is the net present value of investment?

Sheridan Corporation is reviewing an investment proposal. The initial cost is $105.600. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There would be no salvage value at the end of the investment's life. Investment Noposal Book Year Value Annual Cash Flows Annual Net Income $69.400 $44,300 39.700 42,600 20,500 8,800 $8.100 12.900 13,900 18,600 36,000 30,300 23,940 15,140