Exercise 12-5 Preference Ranking [LO12-5]

Information on four investment proposals is given below:

		Investment Proposal
	A			B			C			D
Investment required	$	(430,000	)	$	(50,000	)	$	(50,000	)	$	(1,820,000	)
Present value of cash inflows		631,600			70,500			76,800			2,429,200
Net present value	$	201,600		$	20,500		$	26,800		$	609,200
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.