Ranking the projects by profitability index from highest to lowest, the rank order of the projects is:

You are tasked with assessing the performance of the following projects and to rank the projects using the profitability index Project 1 The opportunity cost of capital is 8%. The initial cost of the project is $500,000 and generates the following cash flows $228,000 in year 1, $178,000 in year 2, $249,000 in year 3, and -$12,000 in year 4. Project 2 The opportunity cost of capital is 9%. The initial cost of the project is $480,000 and generates the following cash flows: $200,000 in year 1, $150,000 in year 2. $190,000 in year 3, and S80,000 in year 4. Project 3 The opportunity cost of capital is 7%. The initial cost of the project is S570,000 and generates the following cash flows: $150,000 in year 1, $180,000 in year 2, 8120,000 in year 3, and $200,000 in year 4