Drake Corporation is reviewing an investment proposal. The initialcost and estimates of the book value of the investment at the endof each year, the net cash flows for each year, and the net incomefor each year are presented in the schedule below. All cash flowsare assumed to take place at the end of the year. The salvage valueof the investment at the end of each year is equal to its bookvalue. There would be no salvage value at the end of theinvestment’s life.

Investment Proposal
Year		Initial Cost and Book Value			Annual Cash Flows			Annual Net Income
0		$104,100
1		69,400			$44,300			$9,600
2		42,600			39,700			12,900
3		20,500			34,600			12,500
4		8,800			30,300			18,600
5		0			24,700			15,900

Drake Corporation uses an 11% target rate of return for newinvestment proposals.

What is the cash payback period for this proposal?(Round answer to 2 decimal places, e.g.10.50.)

Cash payback period

years

(b)

What is the annual rate of return for the investment?(Round answer to 2 decimal places, e.g.10.50.)

Annual rate of return for the investment

%

(c)

What is the net present value of the investment? (Ifthe net present value is negative, use either a negative signpreceding the number eg -45 or parentheses eg (45). Round answer to0 decimal places, e.g. 125. For calculation purposes, use 5 decimalplaces as displayed in the factor tableprovided.)

Net present value

$