The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:

Year	Investment	Cash Inflow
1	$73,000	$6,000
2	$6,000	$12,000
3		$20,000
4		$22,000
5		$25,000
6		$23,000
7		$21,000
8		$19,000
9		$18,000
10		$18,000

Required:

1.

Determine the payback period of the investment. (Round your answer to 1 decimal place.)

Payback period

years

2.

Information on four investment proposals is given below:

		Investment Proposal
	A		B		C		D
Investment required	$	(60,000)	$	(130,000)	$	(140,000)	$	(2,100,000)
Present value of cash inflows		86,600		181,100		213,900		2,803,200
Net present value	$	26,600	$	51,100	$	73,900	$	703,200
Life of the project		5 years		7 years		6 years		6 years

Required:

1.

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

Investment Proposal	Project Profitability Index
A
B
C
D