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Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows:
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of Investment Present Value of the Project Internal Rate Project Required Cash Inflows (years) of Return. A $ 130,000 $ 249,323 7 20% B $136,000 $ 222,000 12 18% C $ 105,000 $ 180,035 D $ 169,000 $258,136 7 3 19% 17% 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.
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