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Exercise 12-5 Preference Ranking [LO12-5] Information on four investment proposals is given below: Investment ProposalABCDInvestment required$(420,000)$(200,000)$(170,000)$(2,400,000)Present value of cash inflows589,700276,400259,7003,203,000Net present value$169,700$76,400$89,700$803,000Life of the project5
Exercise 12-5 Preference Ranking [LO12-5]
Information on four investment proposals is given below:
Investment ProposalABCDInvestment required$(420,000)$(200,000)$(170,000)$(2,400,000)Present value of cash inflows589,700276,400259,7003,203,000Net present value$169,700$76,400$89,700$803,000Life of the project5 years7 years6 years6 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.
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