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U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...

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 $176,000 $192,500 $212,000
Annual net income:
Year  1 15,400 19,800 29,700
        2 15,400 18,700 25,300
        3 15,400 17,600 23,100
        4 15,400 13,200 14,300
        5 15,400 9,900 13,200
Total $77,000 $79,200 $105,600


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.) 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

year

B.) Compute the net present value for each project.

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