Parts a & b please. show work it could help. thanks

Post by **answerhappygod** » Mon May 30, 2022 7:53 am

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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 $174,400 $190,750 $218,000 Annual net income: Year 1 15,260 19,620 29,430 2 15,260 18,530 25,070 3 15,260 17,440 22,890 4 15,260 13,080 14,170 5 15,260 9,810 13,080 Total $76,300 $78,480 $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.)
(a) Your answer is correct. Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) Project Bono 3.48 years Project Edge 3.40 years Project Clayton 3.16 years
(b) * Your answer is incorrect. Compute the net present value for each project. (Round answers to O 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 $ $ eTextbook and Media Save for Later Attempts: 1 of 3 used -5917 -7458 2865 Submit Answer
(c) Your answer is correct. 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 17.50 % 16.46 % eTextbook and Media 19.39 %
Your answer is correct. Rank the projects on each of the foregoing bases. Which project do you recommend? Net Project Cash Payback Annual Rate of Return Present Value Bono 30 2 2: Edge 24 Clayton 1: 14 The best project is Clayton 3 14 !