PROBLEM 10-5 Determining the Ranking of Projects [LO2-CC8, 10] CHECK FIGURE (1) Project B profitability index: 1.31 Oxford Company has limited funds available for investment and must ration the funds among five competing projects. Selected information on the five projects follows: Project Investment Required Net Present Value Life of the Project (years) A $480.000 $132.969 7 405,000 126,000 12. 300.000 105,105 7 m 0 0 0 525,000 114 408 3 450.000 (26,088) 6 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, which to accept second and so on. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the five projects in terms of a. Net present value. b. Profitability index 3. Which ranking do you prefer? Why