Gavin and Alex, baseball consultants, are in need of a microcomputer network for their staff. They have received three proposals, with related facts as follows:
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The company uses straight-line depreciation for all capital assets.
(1) Compute the payback period, net present value, and accrual accounting rate of return with initial investment, for each proposal. Use a required rate of return of 14%. (10 points)
(2) Rank each proposal 1, 2, and 3 using each method separately. Which proposal is best? Why? (Five points)