Word - Activity FM BAF1211 - = = = = = Table 1 Goodwill constructions LLC is considering allocating a limited amount of capital investment funds among three proposals. The amount of proposed investment, and net cash flow for each proposal are as follows: 1. Proposed Investment OMR35000 2. Each Proposal has expected life of 8 years. 3. The cost of capitalis 15.2 % (Present Value table attached) Net cash flow during the expected life of the Proposals is given below. Year 1 2 3 5 Proposal A OMR8000 12000 16000 18000 20000 Proposal B OMR22000 20000 18000 15000 10000 Proposal C OMR18000 19000 13000 9500 14000 Note: 1. Net Cash Inflow must be different for every year, , Required: Which Proposal is preferable on the basis of the following capital budgeting evaluation methods? And Why? 1) Payback Period 1) Net Present Value The following are the present value factors Discount 1 2 factor/year 1096 0.909 0.326 0.751 0.683 0.621 1196 0.901 0.812 0.731 0.659 0.593 1296 0.893 0.797 0.712 0.636 0.567 1396 0.885 0 E3 0.693 0.613 0.543 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 W L