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The following table contains information about four projects in which Reynolds Corporation has the opportunity to invest. This information is based on estimates that different
The following table contains information about four projects in which Reynolds Corporation has the opportunity to invest. This information is based on estimates that different managers have prepared about their potential project. E (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) Data Table Net Present Value 1st preferred 2nd preferred 3rd preferred 4th preferred Life of Project Internal Rate of Return Profitability Index Payback Accounting Period in Rate of Years Return 5 24% 1.30 2.77 20% Net Investment Present Project Required Value Project A $ 205,000 $ 61,770 Project B $ 420,000 $ 19,032 Project C $ 1,010,000 $ 214,075 Project D..... $ 1,540,000 $ 2,796 6 22% 1.05 3.18 14% D 3 19% 1.21 2.13 10% 4 12% 1.00 3.03 21% B A Print Done
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