Wellington Corp.

Wellington Corporation estimates that it will have $500,000 available for capital investments next year. Half of this will be reserved for emergency projects and half will be invested in the most desirable projects from the following list. None of the investments has a residual value.

Project Added Expected After-Tax Estimated Number Investment Cash Inflow Life of Project

1 $100,000 $25,000 6 years
2 100,000 30,000 4
3 40,000 5,000 15
4 20,000 10,000 2
5 50,000 12,500 3

Required: Rank the projects in order of their desirability.