A options:

1.Body Lotions, Liquid Soap

2. 1, 2, 3, 4, 5, 6, 7, 8 years

3. 1, 2, 3, 4, 5, 6, ,7, 8 years

B Options:

1. Greatest, smallest

2. Greatest, smallest

Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $72,000 $32,000 Useful life 4 years 7 years Estimated residual value 0 0 Estimated total income over the useful life $7,200 $8,960 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer 2.5 X % Truck 4 X % Feedback Check My Work Divide the estimated average annual income by the average investment. Investment cost plus residual value, divided by two, equals average investment. Cash Payback Method Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion 1 $170,000 $ 90,000 2 150,000 90,000 3 120,000 90,000 4 100,000 90,000 5 70,000 90,000 6 40,000 90,000 40,000 90,000 8 30,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. Payback period for liquid soap Payback period for body lotion net cash flows in the early years of the project life will be favored over the one with the net cash b. The project with the flows in the initial years