Analyze Capital Projects and Provide Recommendations

Randolph Inc. is considering the following three capital project proposals.

Proposal A Proposal B Proposal C

Initial investment $$350,000$ $$280,000$ $$140,000$

Annual net cash flows $$105,000$ $$88,200$ $$56,000$

Disinvestment $$0$ $$0$ $$0$

Life $5$ years $4$ years $3$ years

The company initially screens projects considering $(1)$ a payback period of $2\mathrm{.}5$ years or less and $(2)$ a positive net present value using a discount rate of $10\%$

b$.$ Compute the net present value for each proposal and determine whether each proposal passes the initially screening based on your results.

Note: Round your answer to the nearest dollar.

Proposal A Proposal B Proposal C

Net present value of all cash flows Answer

Answer

Answer

Accept or Reject Answer

Accept

Answer

Reject

Answer

Reject