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only looking for an accounting rate of return for prop x and prop y 16.87, 4.95 and 50.2062 are all incorrect Ranking Investment Proposals:Payback Period,
only looking for an accounting rate of return for prop x and prop y
16.87, 4.95 and 50.2062 are all incorrect
Ranking Investment Proposals:Payback Period, Accounting Rate of Return, and Net Present Value Presented is information pertaining to the cash flows of three mutually exclusive investment proposals: Proposal X Proposal Y Proposal Z Initial investment $81,000 $81,000 $81,000 Cash flow from operations Year 1 80,000 40,500 81,000 Year 2 1,000 40,500 Year 3 41,000 41,000 Disinvestment 0 0 0 Life (years) 3 years 3 years 1 year (a) Select the best investment proposal 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 14 percent. Round accounting rate of return four decimal places. Round net present value to the nearest whole number. Use negative signs with your answers when appropriate. Proposal X Best proposal Payback period (years) Accounting rate of return Net present value Proposal Y 2 16.87 X 13,364 Proposal z 1 Z OXY (9,947) X 4.95 x 17,619Step by Step Solution
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