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     $164,800   $180,250   $204,000   Annual net income:               Year  1   14,420   18,540   27,810           2   14,420   17,510   23,690           3   14,420   16,480   21,630           4   14,420   12,360   13,390           5   14,420   9,270   12,360     Total   $72,100   $74,160   $98,880   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   enter the cash payback period in years rounded to 2 decimal places years Project Edge   enter the cash payback period in years rounded to 2 decimal places years Project Clayton   enter the cash payback period in years rounded to 2 decimal places years   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   $enter a dollar amount rounded to 0 decimal places    $enter a dollar amount rounded to 0 decimal places    $enter a dollar amount rounded to 0 decimal places      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   enter percentages rounded to 2 decimal places %

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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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     $164,800   $180,250   $204,000  
Annual net income:              
Year  1   14,420   18,540   27,810  
        2   14,420   17,510   23,690  
        3   14,420   16,480   21,630  
        4   14,420   12,360   13,390  
        5   14,420   9,270   12,360  
  Total   $72,100   $74,160   $98,880  

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   enter the cash payback period in years rounded to 2 decimal places years
Project Edge   enter the cash payback period in years rounded to 2 decimal places years
Project Clayton   enter the cash payback period in years rounded to 2 decimal places years
 
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   $enter a dollar amount rounded to 0 decimal places    $enter a dollar amount rounded to 0 decimal places    $enter a dollar amount rounded to 0 decimal places   
 
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   enter percentages rounded to 2 decimal places %
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