Chapter 12 Question 2:

Information on four investment proposals is given below:

		Investment Proposal
	A			B			C			D
Investment required	$	(130,000	)	$	(140,000	)	$	(150,000	)	$	(1,260,000	)
Present value of cash inflows		185,600			193,800			228,600			1,681,100
Net present value	$	55,600		$	53,800		$	78,600		$	421,100
Life of the project		5 years			7 years			6 years			6 years

Required:

1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.)

2. Rank the proposals in terms of preference.