Reference no: EM13523183

Yancey Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows:

Project Investment
Required Net
Present
Value Life of
the
Project
(years) Internal
Rate
of Return
A $950,000 $330,400 8 19%
B $720,000 $203,390 13 15%
C $650,000 $363,650 8 24%
D $850,000 $259,500 4 23%

The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, which to accept second, and so forth. The company's investment funds are limited.

Required:

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

Project Profitability
Index
A ?
B ?
C ?
D ?

2.
In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return.

1.Net PresentValue
2.Project Profitability Index
3.Internal Rate of Return
First preference 1. a, b, c, or d? 2. a, b, c, or d? 3. a, b, c, or d?
Second preference 1. a, b, c, or d? 2. a, b, c, or d? 3. a, b, c, or d?
Third preference 1. a, b, c, or d? 2. a, b, c, or d? 3. a, b, c, or d?
Fourth preference 1. a, b, c, or d? 2. a, b, c, or d? 3. a, b, c, or d?