The Borders and Noble partnership 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 Mary $140,000 Project Winnie $175,000 Project Sarah $190,000 Capital investment Annual net income (Profit): Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL $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 $66,000 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 12%. (Assume cash flows occur evenly throughout the year.) REQUIRED 1. Compute the cash payback period for each project. (Round to two decimals) (8 marks) 2. Compute the net present value for each project. (Round to nearest dollar.) (12 marks) 3. Compute the annual rate of return for each project. (Round to two decimals.) (Hint: Use average annual net income in your computation.) (6 marks) 4. Rank the projects on each of the foregoing bases. Explain which project you recommend? (4 marks)