Question
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
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 $92,000 $92,000 $92,000 Cash flow from operations Year 1 90,000 46,000 92,000 Year 2 2,000 46,000 Year 3 47,500 47,500 Disinvestment 0 0 0 Life (years) 3 years 3 years 1 year Select the best investment proposal using the payback period, the accounting rate of return on the initial investment, and the net present value criteria. Assume that the organization's cost of capital is 14 percent. Note: Follow rounding instructions noted for each computation. Use a negative sign with your answers, when appropriate.
Proposal X Proposal Y Proposal Z Best proposal Payback period (years) Answer 2 Answer 2 Answer 1 Answer Z Accounting rate of return; Round answers to 4 decimal places. Answer 34.42 Answer 34.42 Answer 0 Answer X,Y Net present value; Round answers to nearest whole number. Answer 20,559 Answer 15,788 Answer (11,298) Answer X
I seem to be struggling with accounting rate of return for proposal X & Y
And Net present Value for Proposal X
Stuck as I believe my math is correc
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