Assume in Analyzing Alternative Proposals That Proposal F Has a Useful

Multiple Choice

Assume in analyzing alternative proposals that Proposal F has a useful life of six years and Proposal J has a useful life of nine years.What is one widely used method that makes the proposals comparable?

A) Adjust the life of Proposal F to a time period that is equal to that of Proposal J and add its estimated residual value to the cash inflow at the end of year nine.
B) Adjust the life of Proposal J to a time period that is equal to that of Proposal F and add its estimated residual value to the cash inflow at the end of year six.
C) Adjust the life of Proposal F and Proposal J to a time period equal to the average of six and nine years (7.5 years) and add its estimated residual value to the cash inflow at the end of operating life.
D) Adjust the life of Proposal J to a time period that is equal to that of Proposal F and deduct last three years cash inflow of Proposal J from its total cash inflow.