Problem 26.3A

nalyzing Capital Investment Proposals gures shown below. Required investment in equipment Estimated service life of equipment Estimated salvage value. Estimated annual net cash flow Estimated increase in annual net income Problem 26.3A Sample Worked Problem: Problem 26.3B Willie Industries Part A Proposal A (1) Payback period: (2) Return on average investment: (3) Net present value, discounted at 10% : Proposal B (1) Payback period: (2) Return on average investment: (3) Net present value, discounted at 10% : Part B: Based on your computations in Part A, which proposal do you consider to be the better investment? Explain