Following data relate to five independent investment projects:Projects Initial (Rs) Annual Cash Life…

Following data relate to five independent investment projects:

       Projects              Initial (Rs)       Annual Cash     Life in Years  

                                        Outlay            Inflow (Rs)

           A                          500,000              125,000                          8    

           B                          120,000                12,000                        15    

           C                            92,000                15,000                        20    

           D                              5,750                  2,000                          5    

           E                            40,000                  6,000                        10    

Assume a 10 per cent required rate of return and a 35 per cent tax rate. Rank these five investment projects according to each of the following criteria: (a) payback period, (b) accounting rate of return, (c) net present value index, and (d) internal rate of return.

 

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