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Life of Present Project Investment Required value of the Project Internal Rate of Cash Inflows (years) Return A $ 180,000 $ 209,323 7 21%
Life of Present Project Investment Required value of the Project Internal Rate of Cash Inflows (years) Return A $ 180,000 $ 209,323 7 21% B $ 141,000 $ 182,000 12 19% C $ 104,000 $ 140,035 7 $ 175,000 $ 218,136 3 20% 16% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the profitability index for each project. (Round your answers to 2 decimal places.) Profitability Project Index A 1.16 1.29 B 0 D 1.68 1.56 Life of Present Investment value of the Project Internal Rate of Project Required Cash Inflows (years) Return A BCD $ 180,000 $ 141,000 $ 104,000 $ 175,000 $ 209,323 7 21% $ 182,000 12 19% $ 140,035 7 20% $ 218,136 3 16% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Profitability Index Net Present Value Internal Rate of Return First preference D C A Second preference A D C Third preference B B B Fourth preference C A D
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