Exercise 13-11 Preference Ranking of Investment Projects (L013-5) Oxford Company has limited funds available for investment and mustration the funds among four competing projects. Selected Information on the four projects follows: Life of Net the Internal Investment Present Project Rate Project Required Value (years) of Return $870, eee $576, 770 9 B $755, eee $308,594 14 17% $720,000 $442, 949 9 244 D $920, eee $145, 122 5 16% 25 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index Lor each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 In order of preference, rank the four projects in terms of net present value, project profitability Index and internal rate of return. Not Present Value Project Profitability Index Intemal Rate of Return First preference Project A B D Required Value $870, eee $576, 770 $755, ove $388,594 $720, 880 $442,949 $92e,eee $145,122 (years) of Return 9 254 14 17 9 24 5 165 The net present values above have been computed using a 10% discount rate. The company wants your assistance is which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal re Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Project Profitability Index 00 D Required 2 > Project B C D Required Valur $878, eee $576, 770 $755,000 $308,594 $720,000 $442,949 $920,000 $145, 122 (years of Return 9 25% 14 175 9 244 5 16 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return Complete this question by entering your answers in the tabs below. Required 1 Required 2 In order of preference, rank the four projects in terms of net present value, project profitability Index and internal rate of return. Net Present Value Project Profitability Index Internal Rato of Return First preference Second preference Third preference Fourth preference
