Exercise 25-11 Your answer is partially correct. Try again Drake Corporation is reviewing an investment proposal. The initial cost is $103,400. 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 Investment Proposal Annual Year Book Value Cash Flows 2 $69,900 $44,700 2 41,600 40.700 3 20,900 36,000 4 7.800 29,100 5 0 25,280 Annual Net Income $11,200 12,400 15.300 16,000 17,400 Drake Corporation uses an 115 target rate of return for new Investment proposal hew Score e Results by Study elective (b) What is the annual rate of return for the investment? (Round answer to 2 decimal places, e. 9. 10.5096.) Annual rate of return for the investment 1.75%