Western Mfg. Co. is considering two capital budgeting pro­posals, each with a 10-year life, and each requiring an initial cash outlay of $50,000. Proposal A shows a higher return on average investment than Proposal B, but Proposal B shows the higher net present value. The most probable explanation is that:

a. Expected cash inflows tend to occur earlier in Proposal B.

b. Total expected cash inflows are greater in Proposal B.

c. The payback period is shorter in Proposal A.

d. The discounted future cash flows approach makes no provision for recovery of the original $50,000 investment.

Answer rating: 100% (QA)

Answer Option B Total expected cash inflows are greater in Pro... View the full answer