Project 1: Retailing Manufacturing Facility This project would require an initial investment of $5,020,000. It would generate $1,018,000 in additional net cash flow each year. The new machinery has a useful life of eight years and a salvage value of $1,970,000. Project 2: Purchase Patent for New Product The patent would cost $3,995,000, which would be fully amortized over five years. Production of this product would generate $838,950 additional annual net income for Hearne. Project 3: Purchase a New Fleet of Delivery Trucks Hearne could purchase 25 new delivery trucks at a cost of $179,600 each. The fleet would have a useful life of 10 years, and each truck would have a salvage value of $6,700. Purchasing the fleet would allow Hearne to expand its customer territory, resulting in $244,000 of additional net income per year. Required: Determine each project's accounting rate of return. Determine each project's payback period. Using a discount rate of 10 percent, calculate the net present value of each project. Determine the profitability index of each project and prioritize the projects for Hearne.