Comparing, Prioritizing Multiple Projects [LO 11-1, 11-2, 11-3, 11-6] Hearne Company has a number of potential capital investments. Because these projects vary in nature, initial investment and time horizon, management is finding it difficult compare them. Assume straight the depreciation method is used. Project 1: Retooling Manufacturing Facility This project would require an initial investment of $4, 850,000. It would generate $865,000 in additional net cash flow each year. The new machinery has a useful life of eight years and a salvage value of $1,000,000. Project 2: Purchase Patent for New Product The patent would cost $3, 400,000, which would be fully amortized over five years. Production of this products would generate $425,000 additional annual net income for Hearne. Project 3: Purchase a New Fleat of Delivery Trucks Hearne could purchase 25 new delivery trucks at a cos of $115,000 each. The fleet would have a useful life of 10 years, and each truck would have a salvage value of $6,000. Purchase fleet would allow Hearne to expand its customer territory resulting in $200,000 of additional net income per year. Required: 1. Determine each project's accounting rate of return. (Round your answer to 2 decimal places.) 2. Determine each project's period. (Round your answers to 2 decimal places.)