The management of Riker Inc. is exploring five different investment opportunities. Information on the five projects under study follows:

Project Number

$12345$

Investment required $ $(320,000)$ $ $(360,000)$ $ $(430,000)$ $ $(320,000)$ $ $(470,000)$

Present value of cash inflows at a $10\%$

discount rate $409,220445,090521,160295,400554,820$

Net present value $ $89,220$ $ $85,090$ $ $(91,160)$ $ $24,600$ $ $84,820$

Life of the project $6$ years $3$ years $5$ years $12$ years $6$ years

The company$$s required rate of return is $10\%$; thus, a $10\%$ discount rate has been used in the preceding present value computations. Limited funds are available for investment, and so the company cannot accept all of the available projects.

Required:

$1.$ Compute the profitability index for each investment project. $($Round your answers to $2$ decimal places.$)$

$2.$ Rank the five projects according to preference, in terms of $($a$)$ net present value, $($b$)$ profitability index. till $5$