Investment Proposal

A B C D

Investment required $ $(420,000)$ $ $(200,000)$ $ $(170,000)$ $ $(2,400,000)$

Present value of cash inflows $589,700276,400259,7003,203,000$

Net present value $ $169,700$ $ $76,400$ $ $89,700$ $ $803,000$

Life of the project $5$ years $7$ years $6$ years $6$ years

 

 

Required:

Compute the profitability index for each investment proposal.

Note: Round your answers to $2$ decimal places.

Rank the proposals in terms of preference.

Answer rating: 100% (QA)

Profitability Index PI Calculation The profitability index PI is a metric used to evaluate the attra... View the full answer