Given below are four projects (Projects A, B, C, and D) along with their initial investment and the three years future cash inflows. The required rate of return is 15%.

NET PRESENT VALUE AND INTERNAL RATE OF RETURN

Project A Project B Project C Project D

Initial Investment ($50,000) ($100,000) ($80,000) ($180,000)

Year 1 20,000 35,000 20,000 100,000

Year 2 20,000 50,000 40,000 80,000

Year 3 20,000 50,000 60,000 60,000

Compute for the following:

1. Simple Payback Period

2. Net Present Value

3. Profitability Index

4. IRR

5. Ranking using NPV, IRR, PI (in the order of acceptability)