The following table contains information about four projects in which Rostis Corporation has the opportunity to invest. This information is based on estimates that different managers have prepared about the company€™s 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?

Investment Net Present Life of Internal Rate Profitability Payback Period Accounting Rate Project Required Value Prec of Return A. 215,000 42,475 5 B.... 410,000 72,724 6 C.... $1,020,000 $163,812 3 D $1,515,000 85,850 4 22% 25% 19% 13% Index 1.20 1.18 1.16 1.06 n Years 2.87 2.97 2.14 3.00 of Return 20% 15% 13% 21%