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5. You are the head of the project selection team at SIMSOX. Your team is...

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Accounting

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5. You are the head of the project selection team at SIMSOX. Your team is con- sidering three different projects. Based on past history, SIMSOX expects at least a rate of return of 20 percent. Your financial advisors predict inflation to remain at 3 percent into the foreseeable future. Given the following information for each project, which one should be SIMSOX first priority? Should SIMSOX fund any of the other projects? If so, what should be the order of priority based on return on investment? Project: Dust Devils Year Investment Revenue Stream 0 $500,000 50,000 250,000 350,000 0 1 2 3 Project: Ospry Year Investment $250,000 0 1 2 Revenue Stream 0 75,000 75,000 75,000 50,000 Project: Voyagers Year 0 Investment $75,000 1 2 3 4 5 Revenue Stream 0 15,000 25,000 50,000 50,000 150,000

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