Oxford Company has limited funds available for investment and must ration the funds among four competing projects.
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Question:
Oxford 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 Present value of Cash Inflows Life of the Project years Internal Rate of Return
A $ $
B $ $
C $ $
D $ $
The net present values should be computed using a discount rate. The company wants your assistance in determining which project to accept first, second, and so forth.
Required:
Compute the profitability index for each project.
In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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