Solution-Compute the profitability index

Compute the profitability index

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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Compute the profitability index

Reference no: EM132717018

Reference no: EM132717018

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