Solve 27-5

of return is 14 percent? an expected life of eight years and its required rate Problem 27-5. Wellington Corporation estimates that it will have $500,000 available for capital invest- ments next year. Half of this will be reserved for emergency projects and half will be in- vested in the most desirable projects from the following list. None of the investments has a residual value. Project Added Expected After-Tax Estimated Number Investment Cash Inflow Life of Project $100,000 $25,000 6 years 2 100,000 30,000 40,000 5,000 15 20,000 10,000 5 50,000 12,500 1 4 2 4 Required: Rank the projects in order of their desirability