Swanson Corporation is evaluating five different capital expenditure proposals. The company's hurdle rate for net presen

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Swanson Corporation is evaluating five different capital
expenditure proposals. The company's hurdle rate for net present
value analysis is 12%. A 15% salvage value is expected from each of
the investments. Information on the five proposals is as
follows:
A
B
C
D
E
a. Compute the excess present value index for each of the five
proposals.
Round answers to three decimal
places.
A
B
C
D
E
b. Compute the average rate of return for each of the five
proposals.
Round answers to one decimal place. For example, 0.4567 equals
45.7%
A
B
C
D
E
c. Assume that Swanson will commit no more than $200,000 to new
capital expenditure proposals.
Using the excess present value index, which proposals would be
accepted. Select the best answer.
AnswerProposals A and BProposals A and EProposals B and
DProposals C and EProposals A and D
Now using the average rate of return, which proposals would be
accepted? Select the best answer.
AnswerProposals A and BProposals A and EProposals B and
DProposals C and EProposals A and D
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