The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $ 780,000 $ 1,030,000 C$ 1,280,000 D $ 1,700,000 Project A B Project Life 5 4 1st preferred 2nd preferred 3rd preferred 4th preferred ARR 30.00% 19.50% 15.00% 17.70% Payback Period 3.8 4.2 3.9 3.1 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. NPV $ 346,750 $366,562 $ 218,420 $ 247,758 Required 1 Required 2 Rank the four projects in order of preference under each method indicated by the headers: Accounting Rate of Return Payback Net Present Period Value Profitability Index < Required 1 Required 2 > Profitability Index 2.66 2.10 1.44

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The following table contains information about four potential investment projects that Castle Corporation is considering.
Required
Investment
$ 780,000
Payback
Period
3.8
4.2
3.9
3.1
Project
A
B
C
D
$ 1,030,000
$ 1,280,000
$1,700,000.
Project Life
5.
Required 1
1st preferred
2nd preferred
3rd preferred
4th preferred
ARR
30.00%
19.50%
15.00%
17.70%
Required:
1. Rank the four projects in order of preference under each method indicated by the headers:
2. Which method is the best for evaluating the investments?
Complete this question by entering your answers in the tabs below.
NPV
$346,750
Required 2
Rank the four projects in order of preference under each method indicated by the headers:
Accounting
Rate of Return
Payback Net Present
Period
Value
Profitability
Index
Required 1
$366,562
$ 218,420
$247,758
Required 2 >
Profitability Index
2.66
2.10
1.49
1.44
Transcribed Image Text:The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $ 780,000 Payback Period 3.8 4.2 3.9 3.1 Project A B C D $ 1,030,000 $ 1,280,000 $1,700,000. Project Life 5. Required 1 1st preferred 2nd preferred 3rd preferred 4th preferred ARR 30.00% 19.50% 15.00% 17.70% Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. NPV $346,750 Required 2 Rank the four projects in order of preference under each method indicated by the headers: Accounting Rate of Return Payback Net Present Period Value Profitability Index Required 1 $366,562 $ 218,420 $247,758 Required 2 > Profitability Index 2.66 2.10 1.49 1.44
The following table contains information about four potential investment projects that Castle Corporation is considering.
Required
Investment
$ 780,000
$1,030,000
$ 1,280,000
$ 1,780,000
Project
A
B
C
D
Project Life
5
4
ARR
30.00⁰
19.50
15.00
17.70%
Required 1
Required 2
Which method is the best for evaluating the investments?
Which method is the best for evaluating the investments?
< Required 1
Payback
Period
3.8
4.2
3.9
3.1
Required:
1. Rank the four projects in order of preference under each method indicated by the headers:
2. Which method is the best for evaluating the investments?
Complete this question by entering your answers in the tabs below.
NPV
$ 346,750
$366,562
$ 218,420
$ 247,758
Required 2
Profitability Index
2.66
2.10
1.49
1.44
Transcribed Image Text:The following table contains information about four potential investment projects that Castle Corporation is considering. Required Investment $ 780,000 $1,030,000 $ 1,280,000 $ 1,780,000 Project A B C D Project Life 5 4 ARR 30.00⁰ 19.50 15.00 17.70% Required 1 Required 2 Which method is the best for evaluating the investments? Which method is the best for evaluating the investments? < Required 1 Payback Period 3.8 4.2 3.9 3.1 Required: 1. Rank the four projects in order of preference under each method indicated by the headers: 2. Which method is the best for evaluating the investments? Complete this question by entering your answers in the tabs below. NPV $ 346,750 $366,562 $ 218,420 $ 247,758 Required 2 Profitability Index 2.66 2.10 1.49 1.44
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