Monitor Consulting Inc. is in need of a Date Analytic Terminal for its financial analysts. The company has received three proposals, with related facts as follows:

Proposal A Proposal B Proposal C

Initial investment in equipment $90,000 $90,000 $90,000

Annual cash inflow increases in o

Monitor Consulting Inc. is in need of a Date Analytic Terminal for its nancial analysts. The company has received three proposals, with related facts as follows: ProposalA Proposal B Proposal C Initial investment in equipment $90,000 $90,000 $90,000 Annual cash inow increases in operations: Year 1 80,000 45,000 90,000 Year 2 10,000 45, 000 0 Year 3 45, 000 45,000 0 Salvage value 0 0 0 Estimated life 3 yrs. 3 yrs. 1 yr. The company uses straight-line depreciation for all capital assets. Ignore income taxes. Required: a. Compute the payback period, net present value, and accrual accounting rate of return using average annual income, for each proposal. Use a discount rate of 14 percent. b. Rank each proposal 1, 2, and 3 using each method separately. Which proposal is best? Why