Bock Construction Company Is Considering Four Proposals for the Construction

question 120

Essay

Bock Construction Company is considering four proposals for the construction of new loading facilities that will include the latest in ship loading/unloading equipment.After careful analysis,the company's accountant has developed the following information about the four proposals:
$$\begin{array} { | l | c | c | c | c | } \hline & \text { Proposal 1 } & \text { Proposal 2 } & \text { Proposal 3 } & \text { Proposal 4 } \\\hline \text { Payback period } & 4 \text { years } & 4.5 \text { years } & 6 \text { years } & 7 \text { years } \\\hline \text { Net present value } & \$ 80,000 & \$ 178,000 & \$ 166,000 & \$ 308,000 \\\hline \text { Internal rate of return } & 12 \% & 14 \% & 11 \% & 13 \% \\\hline \begin{array} { l } \text { Accrual accounting rate of } \\\text { return }\end{array} & 8 \% & 6 \% & 4 \% & 7 \% \\\hline\end{array}$$ Required:
How can this information be used in the decision-making process for the new loading facilities? Does it cause any confusion?

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Definitions:

Social Category

A Social Category represents a group of people who share a common characteristic or attribute but do not necessarily interact or identify with each other.

Similar Status

A condition where individuals or entities share comparable levels of prestige, importance, or hierarchy within a social or organizational structure.

Identify

The act of recognizing or establishing who or what someone or something is.

Proportion

A part, share, or number considered in comparative relation to a whole, often used to describe the relationship between different quantities or measurements.