Jill Harrington, a manager at Jennings Company, is considering several potential capital investment projects. Data on these projectsfollow:Initial investmentAnnual cash inflowsPV of cash inflowsRequired:Project X$ 40,00025,00045,000Project Y$ 20,00010,00033,000Project Z$ 50,00025,40070,0001. Compute the payback period for each project and rank order them based on this criterion.2. Compute the NPV of each project and rank order them based on this criterion.3. Compute the profitability index of each project and rank order them based on this criterion.4. If Jennings has limited funds to invest, which ranking should Jill recommend?

1. Payback period = Initial investment/annual cash flowsParticular X Y Z Initial investments $40,000…

Answered: Jill Harrington, a manager at Jennings…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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