Banshee, Inc. is strapped for cash for investment projects and must decide which of four projects it will fund. Below are the projects and information about them.

Project	Investment required	Net Presnt Value*	Life of the project year	internal rate of return
1	$750,000	$212,685	6	14%
2	$625,000	$194,722	10	15%
3	$495,000	$168,597	6	17.5%
4	$666,000	$148,732	4	23%

*An 11% discount rate was used to compute the net present value.

1. Compute the project profitability index for each project s.

2. Rank the four projects in order of preference in terms of:

a. internal rate of return

b. project profitability index

c. net present value

3. Which of the three rankings above do you prefer and what are the strengths and weakness of each