requirement 2

The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows: Project Number 1 2 3 Investment $ (540,000) $ ( 390,000) $ (340 ,000) (450,000) required Present value of cash inflows at a 8% discount 715,947 $ 175,947 549,775 416,102 399,353 rate 99,775 26,102 59,353 Net present value $ Life of the 12 years ars 3 years ars project Internal rate of 15% 148 10% 178 return Because the company's required rate of return is 8%, a 8% 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: 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 Required 1 2 Compute the project profitability index for each investment project. (Round your answers to 2 decimal places.) Project Profitabilit Index 1 2 3 4 Required 2 Required 1 The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows Project Number 1 2 4 Investment $ (450,000) $ (540,000) $ (390,000) $ ( 340,000) required Present value of cash inflows at a 8% discount 715,947 416,102 26,102 549,775 399,353 rate $ 175,947 99,775 59,353 $ Net present value $ Life of the ars 6 years 12 years 3 years project Internal rate of 14% 10% 178 15% return Because the company's required rate of return is 8%, a 8% 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 Required 2 1 Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return. Net Present Value Project Profitability Rate of Index Internal Return First preference Second preference Third preference Fourth preference Required 2> Required 1