1. The project profitability index for each proposal is:

Project	Present Value of Cash Inflows (a)	Investment Required (b)	Project Profitability Index (a) (b)
A	$535,000	$350,000	1.53
B	$590,000	$390,000	1.51
C	$670,000	$450,000	1.49
D	$730,000	$480,000	1.52

2. The ranking would be:

Project	Project Profitability Index
A	1.53
D	1.52
B	1.51
C	1.49

Note that project A has the lowest net present value of the four projects, but it is ranked first in terms of the project profitability index.