Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value. Life of the project Investment Proposal A 4 Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. B C D Project Profitability Index Investment Proposal Rank Preference: $(106,000) $(116,000) $(86,000) $(144,000) 142,040 178,640 118,680 213,120 $36,040 $ 62,640 5 years 7 years $ 32,680 $ 69,120 6 years 6 years
Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value. Life of the project Investment Proposal A 4 Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. B C D Project Profitability Index Investment Proposal Rank Preference: $(106,000) $(116,000) $(86,000) $(144,000) 142,040 178,640 118,680 213,120 $36,040 $ 62,640 5 years 7 years $ 32,680 $ 69,120 6 years 6 years
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 11P
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