Solution-Compute the project profitability index for each

Compute the project profitability index for each investment

Assignment Help Managerial Accounting

Reference no: EM132747914

Question - Information on four investment proposals is given below:

	Investment Proposal
	A	B	C	D
Investment required	$(60,000)	$(190,000)	$(110,000)	$(2,660,000)
Present value of cash inflows	88,600	260,600	168,600	3,551,000
Net present value	$28,600	$70,600	$58,600	$891,000
Life of the project	5 years	7 years	6 years	6 years

Required -

1. Compute the project profitability index for each investment proposal.

2. Rank the proposals in terms of preference.

Reference no: EM132747914

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Compute the project profitability index for each investment

Reference no: EM132747914

Reference no: EM132747914

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