Shaylee Corp has $2.00 million to invest in new projects. The companys managers have presented a number of possible options that the board must prioritize. Information about the projects follows:

	Project A		Project B		Project C		Project D
Initial investment	$	431,000	$	246,000	$	736,000	$	961,000
Present value of future cash flows		781,000		431,000		1,216,000		1,576,000

Required:

1. Is Shaylee able to invest in all of these projects simultaneously?

2-A. Calculate the profitability index for each project.

2-B. What is Shaylees order of preference based on the profitability index?

Profitability Index Rank 1-4

Project A

Project B

Project C

Project D