What rank should we assign to each project? Why do payback and NPV not agree com

Question

What rank should we assign to each project? Why do payback and NPV not agree completely? Which criterion is best?

Project Number 1 2 3 4 5 6 7 8 Initial Investment ($2,000) ($2,000) ($2,000) ($2,000) ($2,000) ($2,000) ($2,000) ($2,000) Year   1 $330 $1,666 $160 280 $2,200 $1,200 ($350) 2 330 334 200 280 900 (60) 3 330 165 350 280 300 60 4 330 395 280 90 350 5 330 432 280 70 700 6 330 440 280 1,200 7 330 442 280 2,250 8 1,000 444 280 9 446 280 10 448 280 11 450 280 12 451 280 13 451 280 14 452 280 15 10,000 (2,000) 280 Sum of Cash Flow Benefits $3,310 $2,165 $10,000 $3,561 $4,200 $2,200 $2,560 $4,150 Excess of Cash Flow    Over Initial Investment $1,310 $165 $8,000 $1,561 $2,200 $200 $560 $2,150

Explanation / Answer

year Cash flow cum .cash flows rate at 1.8% pv 0 -2000 1310 1 -2000 1 3310 5475 0.9823183 3251.473 2 2165 12165 0.9649492 2089.115 3 10000 13561 0.9478872 9478.872 4 3561 7761 0.9311269 3315.743 5 4200 6400 0.914663 3841.585 6 2200 4760 0.8984902 1976.678 7 2560 6710 0.8826033 2259.464 4150 4150 0.8669974 3598.039 npv 27810.97 pay back period 1year required return 180%

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