The following table contains information about four potential investment projects that Castle Corporation is considering. Required: 1.

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The following table contains information about four potential investment projects that Castle Corporation is considering.

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Required:

1. Rank the four projects in order of preference by using:

a. Accounting rate of return.

b. Payback period.

c. Net present value.

d. Project profitability index.

2. Which method is the best for evaluating the investments? Why?

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For  book-img-for-question

Managerial Accounting

ISBN: 978-1260413984

4th edition

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

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