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Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Proposal A

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Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Proposal A B D $(90,000) $ (100,000) $170,000) $ (120,000) 126,000 138,000 105,000 160,000 $ 36,000 $ 38,000 $ 35,000 $40,000 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 Proposal Index Rank Preference A B D

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