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A business is considering two alternative investment proposals with the following data: Proposal A Proposal B Investment $800,000 $400,000 Useful life 6 years 8 years

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A business is considering two alternative investment proposals with the following data: Proposal A Proposal B Investment $800,000 $400,000 Useful life 6 years 8 years Estimated annual net cash inflows $175,000 $75,000 Residual value $40,000 $10,000 Depreciation method Straight-line Straight-line How long is the payback period for Proposal A? Oa.7 years Ob. 6 years Oc. 6.5 years Od.4.57 years How long is the payback period for Proposal B? Oa. 5 years Ob.5.33 years Oc. 6.5 years Od.9.75 years What is the accounting rate of return for Proposal A? Oa.6.36% Ob.15% Oc.27.27% Od.3.68% What is the accounting rate of return for Proposal B ? Ca. 8.5% Ob 20% Oc.7.5% Od.6.73%

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