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Determine the project profitability index for each project

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Reference no: EM132517294

Information on three potential projects is given below:

Project                                             A                    B                           C

Investment required               $(170,000)        $(190,000)       $(220,000)

Present value of cash inflows        229,500            294,500          330,000

Net present value                        $59,500           $104,500             $110,000

Required:

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

Question 2. Rank the projects in terms of preference.

  • A B C
  • C B A
  • C A B
  • B C A

Reference no: EM132517294

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