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 $172,800 Project Edge Project Clayton $189,000 $206,000 Capital investment Annual net income: Year 1 2 15,120 3 19,440 18,360 17,280 12,960 9.720 $77,760 15,120 15,120 15.120 15,120 $75,600 29,160 24,840 22.680 14,040 12,960 $103,680 4 5 Total 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. X Your answer is incorrect. Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation) (Round answers to 2 decimal places, eg. 10.50%.) Project Bono Project Edge Project Clayton % 8.23 10.07 % Annual rate of return 8.75 % e Textbook and Media