One of three projects of a company is doing poorly and is being considered for replacement.

The projects are expected to require ₹2,00,000 each, have an estimated life of 5 years, 4 years, and 3 years respectively, and have no salvage value. The required rate of return is 10 percent. The anticipated cash flows after taxes (CFAT) for the three projects are as follows:

(i) Rank each project applying the methods of payback, average rate of return, net present value, and internal rate of return.
(ii) Recommend the project to be adopted and give reasons.

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CFAT Year A B C 12345 50,000 80.000 1,00,000 50,000 80,000 1,00,000 50,000 80,000 10,000 50,000 30,000 1,90,000