Exercise 14-11 (Algo) Preference Ranking of Investment Projects [LO14-5] 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 Internal Rate (years) of Return A $120,000 $214,323 7 17% B $ 143,000 $ 187,000 12 18% C $ 105,000 $ 145,035 7 20% ces D $ 171,000 $ 223,136 3 16% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Index A B
Exercise 14-11 (Algo) Preference Ranking of Investment Projects [LO14-5] 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 Internal Rate (years) of Return A $120,000 $214,323 7 17% B $ 143,000 $ 187,000 12 18% C $ 105,000 $ 145,035 7 20% ces D $ 171,000 $ 223,136 3 16% The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Index A B
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 19PROB
Related questions
Question
None
![Exercise 14-11 (Algo) Preference Ranking of Investment Projects [LO14-5]
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
Internal
Rate
(years)
of Return
A
$120,000
$214,323
7
17%
B
$ 143,000
$ 187,000
12
18%
C
$ 105,000 $ 145,035
7
20%
ces
D
$ 171,000
$ 223,136
3
16%
The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which
project to accept first, second, and so forth.
Required:
1. Compute the profitability index for each project.
2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the profitability index for each project. (Round your answers to 2 decimal places.)
Project
Profitability
Index
A
B](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0160aa38-4eca-4f92-9c0e-ff5d664690ce%2Fe8563a19-53fc-4ddb-a97d-4f7b463a0686%2Fhkbgwlt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 14-11 (Algo) Preference Ranking of Investment Projects [LO14-5]
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
Internal
Rate
(years)
of Return
A
$120,000
$214,323
7
17%
B
$ 143,000
$ 187,000
12
18%
C
$ 105,000 $ 145,035
7
20%
ces
D
$ 171,000
$ 223,136
3
16%
The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which
project to accept first, second, and so forth.
Required:
1. Compute the profitability index for each project.
2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the profitability index for each project. (Round your answers to 2 decimal places.)
Project
Profitability
Index
A
B
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![EBK CFIN](https://www.bartleby.com/isbn_cover_images/9781337671743/9781337671743_smallCoverImage.jpg)
![EBK CFIN](https://www.bartleby.com/isbn_cover_images/9781337671743/9781337671743_smallCoverImage.jpg)