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Information on four investment proposals is given below: Investment Proposal A B D Investment Required $(90,000) $(100,000) $(70,000) $(120,000) Present Value of Cash Inflows
Information on four investment proposals is given below: Investment Proposal A B D Investment Required $(90,000) $(100,000) $(70,000) $(120,000) Present Value of Cash Inflows 125,000 138,000 105,000 160,000 Net Present Value $36,000 $38,000 $35,000 $40,000 Life on the Project 5 years 7 years 6 years 6 years 1. Compute the project profitability index for each investment proposal. 2. Rank the proposals in terms of preference.
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