ing Decisions 25-36 P25-28. Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Presented is information pertaining to the cash flows of three mutually exclusive investment proposals: Value Problems LO2, 3, 4 Proposal A $60,000 Proposal B Proposal $60,000 $60,000 MBC Initial investment.... Cash flow from operations Year 1 Year 2 Year 3 Disinvestment. Life (years) 60,000 50,000 6,000 29,000 0 3 years 30,000 30,000 25,000 0 3 years 0 1 year Required a. Rank these investment proposals using the payback period, the accounting rate of return on initial investment, and the net present value criteria. Assume that the organization's cost of capital is 12 percent. Round calculations to four decimal places. b. Explain the difference in rankings. Which investment would you recommend? LO2. 3.8