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		Project Edge		Project Clayton
Capital investment		$ 171,200		$ 187,250		$ 202,000
Annual net income:
Year 1		14,980		19,260		28,890
2		14,980		18,190		24,610
3		14,980		17,120		22,470
4		14,980		12,840		13,910
5		14,980		9,630		12,840
Total		$ 74,900		$ 77,040		$ 102,720

Depreciation is computed by the straight-line method with no salvage value. The companys cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)

A) Compute cash payback period for each project

B) Compute net present value for each project

C) Compute the annual rate of return for each project (hint: use annual net income in computation)