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Please answer the question in clear handwriting Exercise 12-5 (Algo) Preference Ranking (LO12-5) Information on four investment proposals is given below: Investment required Present value
Please answer the question in clear handwriting
Exercise 12-5 (Algo) Preference Ranking (LO12-5) Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project A $ (120,000) 169,200 $ 49,200 5 years Investment Proposal B $ (50,000) $ (50,000) 67,300 79,000 $ 17,300 $ 29,000 7 years 6 years D $ (360,000) 476,000 $ 116,000 6 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Profitability Proposal Index Rank Preference A B UWDStep by Step Solution
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