w 3 Hearne Company has a number of potential capital investments. Because these projects vary in nature, initial investment, and time horizon, management is nding it difcult to compare them. Assume straight line depreciation method is used. (Future Value of $1, Present Value of $_1, Future Value Annuityo_f$1, Present Value 0.72 Annuity o_f $1.) (Use appropriate factor(s) from the tables provided.) points Project 1: Retooling Manufacturing Facility SkiPPEd This project would require an initial investment of $4,980,000. It would generate $982,000 in additional net cash flow each year. The new machinery has a useful life of eight years and a salvage value of $1,930,000. eBook Project 2: Purchase Patent for New Product _ The patent would cost $3,855,000, which would be fully amortized over ve years. Production of this product Pm\" would generate $732,450 additional annual net income for Hearne. References Project 3: Purchase a New Fleet of Delivery Trucks Hearne could purchase 25 new delivery trucks at a cost of $164,400 each. The fleet would have a useful life of 10 years, and each truck would have a salvage value of $6,300. Purchasing the fleet would allow Hearne to expand its customer territory resulting in $240,000 of additional net income per year. Required: 1. Determine each project's accounting rate of return. 2. Determine each project's payback period. 3. Using a discount rate of 10 percent, calculate the net present value of each project. 4. Determine the profitability index of each project and prioritize the projects for Hearne. Required: 1. Determine each project's accounting rate of return. 2. Determine each project's payback period. 3. Using a discount rate of 10 percent, calculate the net present value of each project. 4. Determine the profitability index of each project and prioritize the projects for Hearne. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine each project's accounting rate of return. (Round your answers to 2 decimal places.) Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Using a discount rate of 10 percent, calculate the net present value of each project. (Round your intermediate calculation 4 decimal places and final answers to 2 decimal places.) Net Present Value Project 1 Project 2 Project 3 < Required 2 Required 4 >Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the profitability index of each project and prioritize the projects for Hearne. (Round your intermediate calcula to 2 decimal places. Round your final answers to 4 decimal places.) Profitability Index Rank Project 1 Project 2 Project 3 < Required 3 Required 4 >