Information on four investment proposals is given below. Investment required Present value of cash inflows Net present value Life of the project Required: 1 Compute the profitability index for each investment proposal Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference Investment Profitability Proposal Index S (150,000) 211,800 $ 61,500 Rank Preference 5 years Investment Proposal $(80,000) 110,400 $ 50,400 7 years 5 (160,000) 241,600 $61.600 6 years D $ (910,000) 1,214,500 $ 304,500 6 years
Information on four investment proposals is given below. Investment required Present value of cash inflows Net present value Life of the project Required: 1 Compute the profitability index for each investment proposal Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference Investment Profitability Proposal Index S (150,000) 211,800 $ 61,500 Rank Preference 5 years Investment Proposal $(80,000) 110,400 $ 50,400 7 years 5 (160,000) 241,600 $61.600 6 years D $ (910,000) 1,214,500 $ 304,500 6 years
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 11P
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