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Vaughan Company has 4 potential projects that they have been investigating. They have collected the following information regarding them: Initial Investment PV of cash inflows
Vaughan Company has 4 potential projects that they have been investigating. They have collected the following information regarding them: Initial Investment PV of cash inflows Payback Period in years ARR NPV of project Project A $50,000 $60,000 3.6 Years 12% $10,000 Project B $200,000 $220,000 3.2 Years 15% $20,000 Project C $100,000 $105,000 4 Years 17% $5,000 Project D $500,000 $575,000 2 Years 8% $75,000 Vaughan only needs 1 machine (project). If they use ARR method to select their project, which project will they choose? O A. Project D O B. Project B OC. Project C OD. Project A
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