Romaica Corp is contemplating of investing in a series of projects. The maximum total capital allocated for all the project is $500,000. The manager of Romaica has hired you to rank the projects that Romaica Corp should invest in. You are provided with the following information. 

  

Rank the project in the order that Romaica Corp should invest and provide your reasons clearly. What is your comment about the IRRs of different projects.

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Projects Project A Project B Project C Project D Profitability Index 0.96 0.80 0.91 0.66 IRR 7% 5% 6.5% 4% Year O investments $200,000 $100,000 $150,000 $200,000 Projects Project A Project B Project C Project D Profitability Index 0.96 0.80 0.91 0.66 IRR 7% 5% 6.5% 4% Year O investments $200,000 $100,000 $150,000 $200,000

Answer rating: 100% (QA)

For ranking the projects it should be consider the profitability index which the ratio of present va... View the full answer