Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please all parts The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows Proiect Number 4
please all parts
The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows Proiect Number 4 Investment required Present value of cash inflows at a 10% $(420,000) $(370,000) $(270,000) (390,000) 483,377 $63, 377 6 years 447, 591 322,239 52,45052,239 57,591 6 years 422,450 discount rate Net present value Life of the project 12 years years Internal rate of return 15% 13% 16% 18% Because the company's required rate of return is 10%, a 10% discount rate has been used in the present value computations above Limited funds are available for investment, so the company can't accept all of the available projects Required 1. Compute the project profitability index for each investment project. 2. Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return Complete this question by entering your answers in the tabs below Required1Required 2 Compute the project profitability index for each investment project. (Round your answers to 2 decimal places.) Project Profitability Index 4 Required 1 Required 2 > The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows Project Number $ (420,000) (370,0) $(270,00e) $(398,000) Investment required Present value of cash inflows at a 10% 483,377 63,377 6 years 322, 239 52,45052,239 $ 57,591 6 years 422.450 447,591 discount rate Net present value Life of the project Internal rate of return 12 years 3 years 1 5% 13% 16% 18% Because the company's required rate of return is 10%, a 10% discount rate has been used in the present value computations above Limited funds are available for investment, so the company can't accept all of the available projects Required: 1. Compute the project profitability index for each investment project. 2. Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below Required 1Required 2 Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return ProjectInter Net Present Profitability of Return Index nal Rate Value First preference Second Third preference Fourth preference Required 1 Required 2Step 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