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The following table contains information about four projects in which Andrews Corporation has the opportunity to invest. This information is based on estimates that different
The following table contains information about four projects in which Andrews Corporation has the opportunity to invest. This information is based on estimates that different managers have prepared about their 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. (a) Net Present Value 1st preferred 2nd preferred 3rd preferred 4th preferred Investment Net Present Life of Internal Rate Profitability Payback Period Accounting Rate Project Required Value Project of Return Index in Years of Return A ..... $ 200,000 $ 52,350 5 1.26 2.86 B ..... $ 400,000 $ 72,2306 1.18 2.96 15% C..... $ 1,000,000 $ 224,075 3 20% 1.22 2.11 D..... $ 1,500,000 $ 85,000 4 1.06 3.00 25 % 12 %
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