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The decimals for the index are INCORRECT. I cannot figure out the correct answer Exercise 12-5 (Algo) Preference Ranking (LO12-5) Information on four investment proposals
The decimals for the index are INCORRECT. I cannot figure out the correct answer
Exercise 12-5 (Algo) Preference Ranking (LO12-5) Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project A $ (60,000) 86,600 $ 26,600 5 years Investment Proposal B D $ (130,000) $ (140,000) $ (2,100,000) 181,100 213,900 2,803, 200 $ 51,100 $ 73,900 $ 703,200 7 years 6 years 6 years Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Profitability Proposal Index Rank Preference A 0.44 Second B 0.39 Third 0.53 First D 0.33 FourthStep by Step Solution
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