PA11-3 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 to compare them. Assume straight line depreciation method is used Project 1: Retooling Manufacturing Facility This project would require an initial investment of $5,200,000. It would generate $928,000 in additional net cash flow each year. The new machinery has a useful life of eight years and a salvage value of $1,084,000. Project 2: Purchase Patent for New Product The patent would cost $3,645,000, which would be fully amortized over five years. Production of this product would generate $583,200 additional annual net income for Heane Project 3: Purchase a New Fleet of Delivery Trucks Hearne could purchase 25 new delivery rucks at a cost of $150,000 each he flee would have a useful te?10 years and each trucx wou have a sa va r ua of Purchasing the fleet would allow Hearne to expand its customer territory resulting in $600,000 of additional net income per year. Required 1. Determine each project's accounting rate of return. (Round your answers to 2 decimal places.) Accounting Rate of Return Project 1 Project 2 Project 3 29.54 % 16.001% 28.001 %