Given the following information on:

• Initial Investment
• Cost of Capital
• Expected cash inflow and outflow

Rank the following projects by highest NPV per invested dollar to lowest. 

Your production team has developed a new prototype that they believe they can bring to market. 

They expect the initial cost of production and distribution to be $35,000. 

They expect sales to start slow, but increase dramatically over 4 years. 

Year 1	$2,000
Year 2	$15,000
Year 3	$28,000
Year 4	$32,000

Assume you can finance this expansion at 2% compounded annually. 

A consulting firm is offering their services for $15,000, with an additional service fee of $10,000 within the first year. 

They claim that you will recoup labour and productivity costs of: 

Year 1	$15,000
Year 2	$8,000
Year 3	$10,000
Year 4	$10,000

You can finance this investment at a rate of 5.5% compounded annually. 

You have the option to expand your production facility at a cost of $215,000. Your team estimate the increased revenues from this expansion at: 

Year 1	$35,000
Year 2	$55,000
Year 3	$85,000
Year 4	$120,000

You can finance this expansion at 3.5% compounded annually. 

Answer rating: 100% (QA)

To determine the NPV Net Present Value per invested dollar for each project we need to calculate the ... View the full answer