Information on four investment proposals is given below:

Investment required...... A: $(90,000) B: $(100,000) C: $(70,000) D: (120,000)

Present value of cash inflows....... A: 126,000 B: 138,000 C: 105,000 D: 160,000

Net present value....... A: $36,000 B: $38,000 C: $35,000 D: $40,000

Life of the project....... A: 5 years B: 7 years C: 6 years D: 6 years

Required (show all work process):

1. Compute the project profitability index for each investment proposal.

2. Rank the proposals in terms of perference.