Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Investment
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Investment Present Value of Life of the Project Project Required Cash Inflows (years) Internal Rate of Return A $ 180,000 $ 289,323 7 21% B $141,000 $ 182,000 12 19% C $ 104,000 $ 140,035 7 20% D $ 175,000 $ 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. 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.) Project Profitability Index The net present values should be computed using a 10% discount rate. The company wants your assist 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 inter 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.) Project Profitability Index A B C D Required: 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 re 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. First preference Second preference Third preference Fourth preference Net Present Value Profitability Index Internal Rate of Return
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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