Exercise 12-5 (Static) Preference Ranking [LO12-5] Information on four investment proposals is given below: Investment Proposal A B C D Investment required $ (90, 000) $ (100, 000) $ (70, 000) $ (120, 000) Present value of cash inflows 126, 000 138,000 105, 000 160 , 000 Net present value $ 36,000 $ 38,000 $ 35, 000 $ 40,000 Life of the project 5 years 7 years 6 years 6 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 Rank Proposal Index Preference A Second B Third First D Fourth