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The following table contains information about four potential investment projects that Castle Corporation is considering. Project Required Investment Project Life ARR Payback Period NPV Profitability
The following table contains information about four potential investment projects that Castle Corporation is considering.
| Project | Required Investment | Project Life | ARR | Payback Period | NPV | Profitability Index |
|---|---|---|---|---|---|---|
| A | $ 820,000 | 5 | 33.00% | 3.2 | $ 387,750 | 1.19 |
| B | $ 1,070,000 | 4 | 20.00% | 4.4 | $ 491,562 | 2.06 |
| C | $ 1,320,000 | 4 | 17.50% | 4.1 | $ 218,920 | 1.53 |
| D | $ 1,820,000 | 5 | 19.20% | 2.9 | $ 248,258 | 1.48 |
Required:
- Rank the four projects in order of preference under each method indicated by the headers:
- Which method is the best for evaluating the investments?
Rank the four projects in order of preference under each method indicated by the headers: Which method is the best for evaluating the investments
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Research Methods In Accounting
Authors: Malcolm Smith
6th Edition
1529779774, 978-1529779776
