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Information on four investment proposals is given below. Investment Proposal D Investment required (90,000) $ (100,000) 5 (70,000) $ (120,000) Present value of cash inflows
Information on four investment proposals is given below. Investment Proposal D Investment required (90,000) $ (100,000) 5 (70,000) $ (120,000) Present value of cash inflows 126,000 138,000 105,000 160,000 Net present value $36.000 $ 38,000 $35,000 540,000 Life of the project 5 years 7 years 6 years 6 years Required: 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 Rank Proposal Index Preference Second B . c D
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