Jill Harrington, a manager at Jennings Company, is considering
several potential capital investment projects. Data on these
projects follow:

Project X 
Project Y 
Project Z 
Initial
investment 

$40,000 

$20,000 

$50,000 
Annual cash
inflows 

25,000 

10,000 

25,400 
PV of cash
inflows 

45,000 

33,000 

70,000 

Required:
1. Compute the payback period for each project and rank
order them based on this criterion. (Round your answers to
2 decimal places.)



Payback Period 
Rank 
Project
X 


Project
Y 


Project Z 



2. Compute the NPV of each project and rank
order them based on this criterion.



NPV 
Rank 
Project
X 


Project
Y 


Project Z 



3. Compute the profitability index of each
project and rank order them based on this criterion. (Round
your answers to 2 decimal places.)



PI 
Rank 
Project
X 


Project
Y 


Project Z 



If Jennings has limited funds to invest, which ranking should
Jill recommend?

NPV Ranking 

Profitability Index Ranking 

Payback Ranking 