The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows:

Project Number

	1			2			3			4
Investment required	$	(400,000	)	$	(350,000	)	$	(250,000	)	$	(370,000	)
Present value of cash inflows at a 10% discount rate		530,740			442,440			303,280			443,800
Net present value	$	130,740		$	92,440		$	53,280		$	73,800
Life of the project		5 years			10 years			5 years			4 years
Internal rate of return		22%			16%			18%			19%

Because the companys 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 cant accept all of the available projects.

Required:

1.

Compute the project profitability index for each investment project. (Round your answers to 2 decimal places.)

Project Profitability Index

1 ??

2 ??

3 ??

4 ??

2.	Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return.