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	$	(270,000	)	$	(450,000	)	$	(360,000	)	$	(480,000	)
Present value of cash inflows		336,140			522,970			433,400			567,270
Net present value	$	66,140		$	72,970		$	73,400		$	87,270
Life of the project		6 years			3 years			12 years			6 years
Internal rate of return		18	%		19	%		14	%		16	%

The net present values above have been computed using a 10% discount rate. Limited funds are available for investment, so the company cant accept all of the available projects.

Required:

1. Compute the profitability index for each investment project.

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