Exercise 12-5 (Algo) Preference Ranking [LO12-5] Information on four investment proposals is given below: Investment Proposal D 6 years $ (126,000) 168,000 $ 42,000 6 years A B C Investment required Present value of cash inflows Net present value $ (240,000) 337,300 $ 97,300 $ (105,000) 144,900 $ 39,900 $ (73,500) 110,250 $ 36,750 Life of the project 5 years 7 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Profitability Proposal Ranki Index Preference A B C D