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Managerial Accounting

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NPV IRR Payback AARR Choose Project

MGRACT-@9P3XV

Your client is considering four projects that will use approximately the same capital investment. They have enough capital to invest in all of these proposals if they meet the criteria. Here are the metrics computed using the project's expected returns:

Proposal 1 Proposal 2 Proposal 3 Proposal 4
Payback period 4 years 3.5 years 5 years 6 years
Net present value \$80,000 \$79,000 \$66,000 \$78,000
Internal rate of return 16% 14% 11% 16%
Accrual accounting rate of return 8% 6% 4% 7%

Which of these proposals, if any, should be pursued, using only these metrics to decide?

Select ALL that apply.

Highlight Answer(s) Below

Proposal 1 Proposal 2 Proposal 3 Proposal 4 None of these