Two investment proposals have been made and the following data thereon are given:

Project ALPHA

Project BETA

Investment

P123,417

P155,934

Depreciable assets included in the investment figure

60,000

72,000

Economic life

8 years

12 years

Annual sales revenue

P65,000

P78,000

Annual out-of-pocket operating cost

36,000

42,500

Income tax rate 35%

Cost of capital 10%

Determine which proposal is the better one based on:

a. Payback period

b. Payback reciprocal

c. Accounting rate of return

d. Average rate of return