Verdugo Corporation is considering three longterm capital investment proposals. Relevant data on each project are as follows.
Project 

Brown 
Red 
Yellow 


Capital investment 
$191,500 
$221,110 
$251,470 

Annual net income: 

Year 
1 
25,125 
20,129 
26,480 

2 
16,204 
20,129 
24,208 

3 
13,327 
20,129 
23,409 

4 
10,262 
20,129 
17,211 

5 
8,105 
20,129 
20,125 

Total 
$73,023 
$100,645 
$111,433 
Salvage value is expected to be zero at the end of each project. Depreciation is computed by the straightline method. The company's minimum rate of return is the company's cost of capital which is 12%. Compute the following and rank the projects for each category:
Instructions
Compute the average annual rate of return for each project. (Round answers to 1 decimal place, e.g. 10.5.)
Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
Compute the net present value for each project. (Round answers to 0 decimal places, e.g. 125.)
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