after looking at the data analysis in Exhibit 1, we are able to eliminate a few projects right away from the ranking of choices we would be interested in. After seeing that project 7 and 8 are mutually exclusive and 7 being a better project based on the quicker payback and initial returns. As well we can see that project 2 is in most regards, a terrible investment. We are able to see a negative NPV and an unacceptable MIRR which is lower than our desired discount rate. At a glance we are also able to see that project 6 is on the brink of acceptable which allows our investment team to accurately rank the three lowest projects on the list.
One issue that must be regarded before being able to further progress through my reasons for rank is that the company has acknowledged the potential for the low WACC of 10% value. We are able to acknowledge that this rate in most cases is seen to be hire as noted by the board. From this I was able to slowly adjust the resulting analysis of data to utilize what I thought was to be most important by prioritizing NPV in relation to the increasing WACC value.
After consideration I was able to justify that Project 7 is the best investment as the project is the only project that allows for a positive NPV once passing 14%,