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EXERCISE 14-5 Preference Ranking LO14-5 Information on four investment proposals is given below: Investment Proposal A B C D Investment required.... Present value of cash
EXERCISE 14-5 Preference Ranking LO14-5 Information on four investment proposals is given below: Investment Proposal A B C D Investment required.... Present value of cash inflows.. $(90,000) 126,000 Net present value Life of the project $ 36,000 $(100,000) 138,000 $ 38,000 $(70,000) 105,000 $ 35,000 5 years 7 years 6 years $(120,000) 160,000 $ 40,000 6 years Required: 1. Compute the profitability index for each investment proposal. 2. Rank the proposals in terms of preference
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