The following table contains information about four projects in which Andrews Corporation has the opportunity to invest. This information is based on estimates that different managers have prepared about their potential project.

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?

Internal Rate Profitability Payback Period Accounting in Years 2.77 3.18 Investment Net Present Life of Project Project of Return Required $ 205,000 $ 420,000 Rate of Return 17% Value Index 1.30 1.05 $ 61,770 $ 19,032 $214,075 24% 22% 15% 19% 2.13 11% 1.21 $1,010,000 $ 2,796 12% 1.00 21% 4 3.03 D. $1,540,000