Welsh Industries is evaluating two alternative investment opportunities. The controller of the company has prepared the following analysis of the two investment proposals. Required investment in equipment Estimated service life of equipment Estimated salvage value Estimated annual cost savings (net cash flow) Depreciation on equipment (straight-line basis) Estimated increase in annual net income Proposal A Proposal B $ 400,000 $ 576,000 5 years 6 years $ 80,000 $ 100,000 153,600 64,000 96,000 36,000 57,600 Required: a. For each proposed investment, compute the following. Assume discounted at an annual rate of 10 percent. Use Exhibits 26-3 and 26-4 where necessary. (1) Payback period (2) Return on average investment (3) Net present value b. Based on your computations in part a, which proposal do you consider to be the better investment? Complete this question by entering your answers in the tabs below. Required A Required B For each proposed investment, compute the following. Assume discounted at an annual rate of 10 percent. Use Exhibits 26- 3 and 26-4 where necessary. (Round your "PV factors" to 3 decimal places.) Proposal A years Proposal B years (1) Payback period Return on average investment (3) Net present value %