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QUESTION 1 Partially correct Mark 4.85 out of 9.00PFgquestion 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 A Proposal B Proposal C Initial invesiment 60,000 60,000 60,000 Cash flow from operations Year 1 Year 2 Year 3 0,000 30,000 0,000 29,000 Life (years) 3 years 3 years 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 12 percent. .Round payback period (years) to two decimal places Round accounting rate of return to four dec mal places. .Round net present value to the nearest whole number - Use negative signs with your answers, when appropriate. Proposal A Proposal D Proposal C Dest proposal Payback period (years): Round answers 2 decimal places. 214 Accounting rate of return Round answers to 4 decimal places 3.8888X 13.8888 Net present value; Round answers to nearest whole number 10,700X 8,49B X (6,426) X | A (b) Factors explaining the differences in rankings include all of the following except: The accounting rate of return considers profitability while payback only considers the time required to recover the investment.x While the accounting rate of return explicitly considers the cost of the asset as part of annual depreciation the net present value method considers the cost of the asset as part of the initial investment. Net present value considers the timing of cash flows while payback considers only total cash flows. The net present value method considers the cost of capital while the payback method does not discount future cash flows

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