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Capital Rationing Decision Involving Four Proposals proposal are as follows: the net present value method...

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Accounting

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Capital Rationing Decision Involving Four Proposals proposal are as follows: the net present value method and present value indexes are used to rank the remaining proposals. 1. Compute the cash payback period for each of the four proposals. Assume that net cash flows are uniform throughout the year. \begin{tabular}{ll} & \multicolumn{1}{c}{ Cash Payback Period } \\ \hline Proposal Sierra & 3 years 5 months \\ Proposal Tango & 2 years 3 months \\ Proposal Uniform & 3 years 2 months \\ \hline Proposal Victor & 2years5months \\ \hline \end{tabular} Average Rate of Return \begin{tabular}{lr} \hline Proposal Sierra & % \\ Proposal Tango & \\ Proposal Uniform & \\ Proposal Victor & % \\ % \end{tabular} 3. Using the results from parts (1) and (2) determine which proposals should be accepted for further analysis and which should be rejected. \begin{tabular}{lc} & Accept / Reject \\ \hline Proposal Sierra & Reject \\ Proposal Tango & Accept for further analysis \\ \cline { 2 - 2 } Proposal Uniform & Reject \\ Proposal Victor & Accept for further analysis \\ \hline \end{tabular} 5. Compute the present value index for each of the proposals in part (4). Round to two decimal places

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