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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
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 $(410.000) $(360,000) $(260,000) $(380,000) Present value of cash inflows at a 10% discount rate 479.050 415,654 326,625 447,660 Net present value $69,050 $ 55,654 $ 66,625 $ 67,660 Life of the project 6 years 12 years 6 years 3 years Internal rate of return 16% 13% 18% 20% Because the company's 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 can't 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 1 2 3 4 Profitability index
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