saved Hibbing Technology is considering two alternative proposals for modernizing its production facilities. To provide a basis for selection, the cost accounting department has developed the following data regarding the expected annual operating results for the two proposals. Required investment in equipment Estimated service life of equipment Estimated salvage value Estimated annual cost savings (net cash flow) Estimated increase in annual net income Proposal A Proposal $ 560,000 $ 490,000 8 years 7 years 5 70,000 112,000 122,500 56,000 40,000 Required: a. For each proposal, compute the following. Assume discounted at an annual rate of 12 percent. Use Exhibits 26.3 and 26-4 where necessary (1) Payback period (2) Return on average Investment (3) Net present value b. On the basis of your analysis in part a state which proposal you would recommend, keeping in mind