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Exercise 14-5 (Algo) Preference Ranking [LO14-5] Information on four investment proposals is given below: B Investment Proposal Investment required Present value of cash inflows

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Exercise 14-5 (Algo) Preference Ranking [LO14-5] Information on four investment proposals is given below: B Investment Proposal Investment required Present value of cash inflows (280,000) 393,900 Net present value Life of the project $ 113,900 5 years $ (140,000) 192,800 $ 52,800 $ (50,000) 78,100 $28,100 7 years 6 years Required: D $ (780,000) 1,038,100 $258,100 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 Proposal Index Rank Preference A B CD 6 years

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