Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Information on four investment proposals is given below: Investment required Present value of cash inflows Investment Proposal A B C D $ (720,000) $ (160,000)
Information on four investment proposals is given below: Investment required Present value of cash inflows Investment Proposal A B C D $ (720,000) $ (160,000) $(130,000) $(1,560,000) 1,013,000 221,800 198,900 2,081,400 $ 293,000 $ 61,800 $ 68,900 $ 521,400 5 years 7 years 6 years 6 years Net present value Life of the project Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Project Rank Profitability Proposal Preference Index A (0.40) Second B (0.38) Third (0.53) First D (0.33) Fourth
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started