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.

$($Click the icon to view the projects information.$)$

Requirements

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.

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.

: 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