Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Project Investment Required Present Value of Cash Inflows Life of the Project (years) Internal Rate of Return A $ 200,000 $ 279,323 7 16% B $ 152,000 $ 252,000 12 21% C $ 100,000 $ 210,035 7 20% D $ 170,000 $ 288,136 3 19% 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.