Information on four investment proposals is given below: Investment Proposal

A B C D

Investment required $ (420,000) $ (200,000) $ (170,000) $ (2,400,000)

Present value of cash inflows 589,700 276,400 259,700 3,203,000

Net present value $ 169,700 $ 76,400 $ 89,700 $ 803,000

Life of the project 5 years 7 years 6 years 6 years

Required:

1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.)

2. Rank the proposals in terms of preference.

C A B D

A B C D

B C A D

D C B A