5)Instructions

required

Wapit iaterlat dacision for a sempecompany involving four proposals Rena ssance Gapital Group is considering allocating a limited amount of capital investmentifunds among fouri preposals. The amount of proposed investment, estimated operating income, and net cas fir flok fori eachiproposalliare as follows: The company's capital rationing policy requires a maximum cash paybach pencd of 3 years. In addition, a minimum average rate of return of 10% is required on all projects. If the preceding standarda are met, the net present yilule method and present value indexes are used to rank the remaining proposals. 1. Compute tha cash panbage period for each ofithe four proposals. 2. Giving effect to straight-line depreciation on the Investments and assuming no estimated residual value, compute the average rate of return for each of the four proposals. If required, round your answers to one decimal place. 3. Using the following format, summarize the results of your computations in parts (2) and (2) by placing the calculated amounts in the first two columns on the left and indicate which proposals shouid bet accepted for further analysis and which should be rejected. If required, round your answers to one decirfall place. 4. For the proposals accepted for further analysis in part (3). compute the net piretent value. Use a rate of 159 and the present value of 51 table above. Round to the nearest dollar. 5. Compute the present value index for each of the proposals in part (4). If required, round your answers to tw decimal places. Select proposal to compute Present value index. Present value index (rounded) 6. Rank the proposals from most attractive to least attractive, based on the present values of net cash flow's computed in part (4). Rank 1st Rank 2nd 7. Rank the proposals from most attractive to least attractive, based on the present value ndexes computed in part (5). Rank 1 st Rank 2nd 8. The analyzis indicates that although Proposal has the larger net present valuar of la not as attractive as Proponal in terms of the amount of prosent walue por dollar invelted proposal Proposal before investing in Proposal considerations that may impact the decision