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 $174,400 Project Edge $190,750 Project Clayton $218,000 Capital investment Annual net income: Year 1 2 3 15,260 15,260 15,260 15,260 15,260 $76,300 19,620 18,530 17,440 13,080 9,810 $78,480 29,430 25,070 22,890 14,170 13,080 4. 5 Total $104,640 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.) 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 e Textbook and Media 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.) Project Bono Project Edge Project Clayton Net present value $ $ 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 % % % e Textbook and Media Rank the projects on each of the foregoing bases. Which project do you recommend? Cash Payback Net Present Value Annual Rate of Return Project Bono Edge Clayton The best project is