Question: Please answer with clear handwriting Exercise 12-5 (Algo) Preference Ranking [LO12-5] Information on four investment proposals is given below: A Investment required Present value of
Please answer with clear handwriting
Exercise 12-5 (Algo) Preference Ranking [LO12-5] Information on four investment proposals is given below: A Investment required Present value of cash inflows $ (120,000) 169,200 $ 49,200 5 years Net present value $ 17,300 7 years $ 29,000 6 years Life of the project Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Profitability Index Rank Preference Proposal A B D Investment Proposal B $ (50,000) 67,300 $ (50,000) 79,000 D $ (360,000) 476,000 $ 116,000 6 years
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