The Three Stages partnership is considering three long-term capital investment proposals. Each investment has a useful life of five years. Relevant data on each project are as follows: Depreciation is calculated by the straight-line method and there is no salvage value. The company s cost of capital is 15%. (Use average net annual cash flows in your calculations.) Instructions (a) Calculate the cash payback period for each project. (b) Calculate the net present value for each project. (c) Calculate the annual rate of return for each project. (d) Rank the projects based on each of your answers for parts (a), (b), and (c). Which project do you recommend?

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