# 26-6A_22e - Average Rate of Return Accept for Further...

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Problem 26-6A Name: Section: Enter the appropriate amount or answer in the shaded cells below. A red asterisk (*) will appear above, below or to the right of an incorrect amount in the outlined cells. 1. Proposal A: -year -month cash pay-back period Year 1 2 3 4 Proposal B: -year -month cash pay-back period Year 1 2 months Proposal C: -year -month cash pay-back period Year 1 2 3 Proposal D: -year -month cash pay-back period Year 1 2 3 months 2. Net Cash Flow Cumulative Net Cash Flow Net Cash Flow Cumulative Net Cash Flow Net Cash Flow Cumulative Net Cash Flow Net Cash Flow Cumulative Net Cash Flow

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Proposal A: ÷ = ÷ Proposal B: ÷ = ÷ Proposal C: ÷ = ÷ Proposal D: ÷ = ÷ 3. Proposal Reject A B C D 4. Proposal B: Year 1 2 3 4 5 Total Amount to be invested Net present value Proposal C: Cash Payback Period

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Unformatted text preview: Average Rate of Return Accept for Further Analysis Present Value of \$1 at 12% Net Cash Flow Presen Net Ca Year 1 2 3 4 5 Total Amount to be invested Net present value 5. Present value index = Total present value of net cash flow Amount to be invested = = 6. First: Second: 7. First: Second: 8. Present Value of \$1 at 12% Net Cash Flow Presen Net Ca Present value index of Proposal B: Present value index of Proposal C: Based on the net present value, the proposals should be ranked as follows: Based on the present value index (the amount of present value per dollar invested), the proposals should be ranked as follows: nt Value of ash Flow nt Value of ash Flow...
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## This note was uploaded on 03/12/2011 for the course ACCT 2011 taught by Professor Field during the Fall '09 term at University of Minnesota Morris.

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26-6A_22e - Average Rate of Return Accept for Further...

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