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Information on four investment proposals is given below: Investment Proposal A B C D Investment required $ (270,000) $ (90,000) $ (100,000) $ (2,800,000) Present

Information on four investment proposals is given below:

Investment Proposal
A B C D
Investment required $ (270,000) $ (90,000) $ (100,000) $ (2,800,000)
Present value of cash inflows 393,500 127,100 151,300 3,738,500
Net present value $ 123,500 $ 37,100 $ 51,300 $ 938,500
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.

image text in transcribed
Information on four investment proposals is given below: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference

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