Capital rationing$$decision for a service company involving four proposalsRenaissance Capital Group is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated operating income, and net cash flow for each proposal are as follows:The company's capital rationing policy requires a maximum$$cash payback period$$of $3$ years. In addition, a minimum$$average rate of return$$of $10\%$ is required on all projects. If the preceding standards are met, the$$net present value method$$and$$present value indexes$$are used to rank the remaining proposals.$$Required:$1.$Compute the cash payback period for each of the four proposals$\mathrm{.}2$ years$3$ years$3$ years $6$ months$3$ years $9$ months$4$ years$2$ years$2$ years $3$ months$3$ years$3$ years $3$ months$4$ years$2$ years$2$ years $9$ months$3$ years$3$ years $6$ months$4$ years$2$ years $3$ months$2$ years $8$ months$3$ years$3$ years $3$ months$3$ years $10$ months$2.$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.$$If required, round your answers to one decimal place.$3.$Using the following format, summarize the results of your computations in parts $(1)$ and $(2)$ by placing the calculated amounts in the first two columns on the left and indicate which proposals should be accepted for further analysis and which should be rejected.$$If required, round your answers to one decimal place$\mathrm{.}2$ years$2$ years, $8$ months$3$ years, $9$ months$4$ yearsAcceptReject$2$ years$2$ years, $8$ months$3$ years, $4$ months$4$ yearsAcceptReject$2$ years$2$ years, $8$ months$3$ years$4$ yearsAcceptReject$2$ years$2$ years, $3$ months$2$ years, $8$ months$4$ yearsAcceptReject$4.$For the proposals accepted for further analysis in part $(3),$ compute the net present value. Use a rate of $15\%$ and the present value of $$1$ table above.$$Round to the nearest dollar.Proposal AProposal CProposal BProposal D$5.$Compute the present value index for each of the proposals in part $(4).$If required, round your answers to two decimal places.Proposal AProposal CProposal BProposal D$6.$Rank the proposals from most attractive to least attractive, based on the present values of net cash flows computed in part $(4).$

Rank $1$st$$Proposal AProposal BProposal CProposal D

Rank $2$nd$$Proposal AProposal BProposal CProposal D$7.$Rank the proposals from most attractive to least attractive, based on the present value indexes computed in part $(5).$

Rank $1$st$$Proposal AProposal BProposal CProposal D

Rank $2$nd$$Proposal AProposal BProposal CProposal D$8.$The analysis indicates that although Proposal$$fill in the blank $1$ of $5$ABCD$$has the larger net present value, it is not as attractive as Proposal$$fill in the blank $2$ of $5$ABCD$$in terms of the amount of present value per dollar invested. Proposal$$fill in the blank $3$ of $5$ABCD$$requires the larger investment. Thus, management should use investment resources for Proposal$$fill in the blank $4$ of $5$ABCD$$before investing in Proposal$$fill in the blank $5$ of $5$ABCD, absent any other qualitative considerations that may impact the decision.