PROBLEM 13-21 Preference Ranking of Investment Projects LO13-5 I he management of Revco Products is exploring four different investment opportunities. Informa- tion on the four projects under study follows: Project Number 2 4 Investment required. Present value of cash inflows $(270,000) $(450,00O) $(360,000) $(480,000) 336,140 522,970 433,400 567,270 $66,140 72.970 73,400 $ 87.270 6 years 18% 3 years 19% 12 years 14% 6 years 16% 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: a. Net present value b. Project profitability index c. Internal rate of return 3. Which ranking do you prefer? Why