Rand corporation is considering five different investment

Reference no: EM13484458 , Length: 20

Rand Corporation is considering five different investment opportunities. The company's cost of capital is 12 percent. Data on these opportunities under consideration are given below.

Project	Investment ($)	PV at 12% ($)	NPV ($)	IRR (%)	Profitability Index (Rounded)
1	35,000	39,325	4,325	16	1.12
2	20,000	22,930	2,930	15	1.15
3	25,000	27,453	2,453	14	1.10
4	10,000	10,854	854	18	1.09
5	9,000	8,749	(251)	11	0.97

Based on these data:

(a) Rank these five projects in the descending order of preference, according to NPV, IRR, and profitability index (or benefit/cost ratio).

(b) Which ranking would you prefer?

Reference no: EM13484458

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