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	$	(600,000	)	$	(550,000	)	$	(400,000	)	$	(520,000	)
Present value of cash inflows at a 8% discount rate		747,110			646,123			660,905			638,880
Net present value	$	147,110		$	96,123		$	260,905		$	118,880
Life of the project		8 years			16 years			8 years			5 years
Internal rate of return		14%			11%			23%			16%

Because the companys required rate of return is 8%, a 8% 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 2. Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return Net Present Project Internal Rate Value Profitability of Return Index First preference Second preference Third preference Fourth preference