Drake Corporation is reviewing an investment proposal. The initial cost is $105,700. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the net income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There would be no salvage value at the end of the investment's life.

Drake corporation uses an 11% target rate of return for new investment proposals. 

(a) What is the cash payback period for this proposal?

Cash payback period _____ years

(b) What is the annual rate of return or the investment?

The annual rate of return for this investment ____ %

(c) What is the net present value of the investment?

Net present value $______.

Year Book Value 1 2 3 4 5 $70,600 41,100 21,700 6,700 Investment Proposal 0 Annual Cash Flows $44,700 39,400 36,000 29,400 24,905 Annual Net Income $9,600 9,900 16,600 14,400 18,205