Dinkel 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.

Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%.

Instructions
(a) Compute the cash payback period for each project.
(b) Compute the net present value for each project.
(c) Compute the annual rate of return for each project.
(d) Rank the projects on each of the foregoing bases. Which project do you recommend?

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Project Granada Project Jackson Project Dorantes Capital investment Annual net income Year 1 $150,000 160,000 $200,000 13,000 13,000 13,000 13,000 13,000 65,000 18,000 17,000 16,000 12,000 9,000 72,000 27,000 22,000 21,000 13,000 12,000 95,000 3 4 Total