Accounting rate of return (ARR) Internal rate of return Net present value (NPV) Payback period Profitability index potential project. (Click the icon to view the projects information.) Requirements 1. Rank the four projects in order of preference by using the a. net present value. b. project profitability index. c. internal rate of return. d. payback period. e. accounting rate of return. 2. Which method(s) do you think is best for evaluating capital investment projects in general? Why? Requirement 1. Rank the projects in order of preference. Requirement 2. Select the method that corresponds to the appropriate explanation. This method indicates profitability by comparing the present value of the investment's net cash inflows with the cost of the investment (already stated at its present value). This method is superior because it incorporates the time value of money. : This method helps to compare the NPV across alternative investments of varying sizes. This method also indicates profitability and incorporates the time value of money. This method will show us the actual rate of return being earned on the investment by equating the present value of the net cash inflows to the investment's cost. In other words, it is the interest rate which brings the investment's NPV to zero. : This method will show the company how quickly it recoups its initial investment. This method will be good for screening out those potential investments that are too risky does not incorporate the time value of money. : This method will give the company an indication of how profitable the investment will be. However, since it does not consider the time value of money, it is not the best indicator cash flows. Data table