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Presented is information pertaining to the cash flows of threemutually exclusive investment proposals: Proposal X Proposal YProposal Z Initial investment $52,000 $52,000 $52,000 Cash flowfrom operations Year 1 50,000 26,000 52,000 Year 2 2,000 26,000Year 3 27,000 27,000 Disinvestment 0 0 0 Life (years) 3 years 3years 1 year (a) Select the best investment proposal using thepayback period, the accounting rate of return on initialinvestment, and the net present value criteria. Assume that theorganization's cost of capital is 10 percent. Round accounting rateof return four decimal places. Round net present value to thenearest whole number. Use negative signs with your answers, whenappropriate. Proposal X Proposal Y Proposal Z Best proposal Paybackperiod (years) Answer 2 Answer 2 Answer 1 Answer Accounting rate ofreturn Answer 0.173 Answer 0.5065 Answer 0.1 Answer Net presentvalue Answer 15,393 Answer 13,409 Answer (4,732) Answer (b) Factorsexplaining the differences in rankings include all of the followingexcept: The net present value method considers the cost of capitalwhile the payback method does not discount future cash flows. Netpresent value considers the timing of cash flows while paybackconsiders only total cash flows. While the accounting rate ofreturn explicitly considers the cost of the asset as part of annualdepreciation the net present value method considers the cost of theasset as part of the initial investment. The accounting rate ofreturn considers profitability while payback only considers thetime required to recover the investment. Mark 1.00 out of 1.00