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Information on four investment proposals is given below: A Investment required Present value of cash inflows Net present value $ (150,000) 211,800 $ 61,800
Information on four investment proposals is given below: A Investment required Present value of cash inflows Net present value $ (150,000) 211,800 $ 61,800 Life of the project 5 years Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. B Investment Proposal $ (80,000) 110,400 $ 30,400 7 years C $ (160,000) 241,600 $ 81,600 6 years D $ (910,000) 1,214,500 $ 304,500 6 years
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