Exercise 12-5 Preference Ranking [LO12-5]

Information on four investment proposals is given below:

		Investment Proposal
	A			B			C			D
Investment required	$	(150,000	)	$	(80,000	)	$	(160,000	)	$	(910,000	)
Present value of cash inflows		211,800			110,400			241,600			1,214,500
Net present value	$	61,800		$	30,400		$	81,600		$	304,500
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.