E12-54B Comparing capital budgeting methods (Learning Objective 5) The following table contains information about four projects in which Orion Corporation has the opportunity to invest. This information is based on estimates that different man- agers have prepared about the company's potential project. Project A. B D. Investment Net Present Required Value $ 220,000 $ 61,190 $ 410,000 $1,030,000 $1,545,000 $ 37,744 $191,498 $ 52,680 b. project profitability index. c. internal rate of return. Life of Project 5 6 d. payback period. e. accounting rate of return. 3 4 Internal Rate Profitability Payback Period in Years of Return Index 1.28 1.09 1.19 1.03 Requirements 1. Rank the four projects in order of preference by using the a. net present value. 23% 22% 18% 12% 2. Which method(s) do you think is best for evaluating capital investment projects in general? Why? 2.82 3.20 2.17 3.07 Accounting Rate of Return 20% 14% 13% 24%

E12-54B Comparing capital budgeting methods (Learning Objective 5) The following table contains information about four projects in which Orion Corporation has the opportunity to invest. This information is based on estimates that different managers have prepared about the company's potential nminet. 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