Time left 2:25:27 Capital Budgeting (10 points) Mercantile Corp. is considering an investment proposal. The initial cost of the investment, the net cash flows for each year, and the net income for each year are presented below. There is no salvage value at the end of the investment's life. Year 0 1 2 3 4 5 Initial Cost $200,000 Annual Cash Flow Annual Net Income $65,000 $25,000 62,000 22,000 62,000 22,000 55,000 15,000 51,000 11,000 Mercantile Corp uses a 12% target rate of return for new investment proposals. Answer the questions in the text box below and Show your work. Note: the Present Value Tables are provided below this question (scroll down). 1) What is the cash payback period for this proposal? (2 pts) 2) What is the average annual net income for this investment? (1 pt) 3) What is the annual rate of return for this investment? (2 pts) 4) What is the net present value of this investment? (4 pts). Time left 2:25:11 Year Amount I Factor Present Value Total 5) What is your recommendation to Bandon Company regarding this investment? (1pt)