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The following is a list of 4 investments being considered for ABC Company. Assuming an interest rate of 6%. Proposal Proposal Proposal Proposal A B
The following is a list of 4 investments being considered for ABC Company. Assuming an interest rate of 6%. Proposal Proposal Proposal Proposal A B C D Investment 550,000 450,000 290,000 580,000 Year Cash Flows 1 130,000 150,000 80,000 145,000 2 170,000 150,000 90,000 145,000 3 140,000 150,000 70,000 145,000 4 190,000 150,000 65,000 145,000 5 75,000 150,000 85,000 145,000 Part A) What is the cash payback period of each investment? (6 marks) Part B) What is the average investment for each of the investments if and the residual values are as follows: Proposal A $55,000, Proposal B $45,000, Proposal C $29,000 and Proposal D $58,000? (8 marks) Part C) What is the Average Rate of Return of each investment ?
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