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Compute the profitability index

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Reference no: EM132717018

Question - Information on four investment proposals is given below

Investment proposals

A

B

C

D

Investment required

85,000

200,000

90,000

170,000

Present value of cash inflows

119,000

250,000

135,000

221,000

Life of the project

5 years

7 years

6 years

6 years

Required -

1. Compute the NPV.

2. Compute the profitability index.

3. Rank the projects according to NPV and then profitability index.

Reference no: EM132717018

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