An investment center in Shellforth Corporation was asked to identify three proposals for its capital budget. Details of those proposals:

Capitol Budgets Proposal

A B C

Capital required $80,000 $50,000 $150,000 Annual operating return 24,000 16,000 15,000

Shellforth uses residual income to evaluate all capital budgeting projects. Its minimum required return is 12 percent. a. Assume you are the investment center manager. Which project do you prefer? Why? b. Assume your investment center