D Information on four investment proposals is given below:Investment ProposalC$ (70,000)105,000$ 35,0006 yearsD$ (120,000)160,000$ 40,0006 yearsABInvestment requiredNet present value.Present value of cash inflows$ (90,000)126,000$ 36,000$ (100,000)138,000$ 38,000Life of the project5 years7 yearsRequired:1. Compute the profitability index for each investment proposal.Note: Round your answers to 2 decimal places.2. Rank the proposals in terms of preference.Investment ProfitabilityProposalIndexRankPreferenceABCD

Step 1:We have to calculate the profitability index for each investment proposal and then rank the…

Answered: Information on four investment…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 4BE: Internal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of...

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nformation on four investment proposals is given below: Investment Proposal A B C D Investment required $ (94,000 ) $ (104,000 ) $ (74,000 ) $ (126,000 ) Present value of cash inflows 141,000 153,920 100,640 194,040 Net present value $ 47,000 $ 49,920 $ 26,640 $ 68,040 Life of the project 5 years 7 years 6 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Investment Proposal Project Profitability Index Rank Preference A ____________ Second B ____________ Third C ____________ Fourth D ____________ First
Information on four investment proposals is given below: Investment Proposal A B C D Investment required $ (330,000) $ (40,000) $ (190,000) $ (2,380,000) Present value of cash inflows 480,000 56,500 286,700 3,178,500 Net present value $ 150,000 $ 16,500 $ 96,700 $ 798,500 Life of the project 5 years 7 years 6 years 6 years 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.
Information on four investment proposals is provided below: Investment Proposal A B C D Investment required $ (45,000 ) $ (50,000 ) $ (35,000 ) $ (60,000 ) Present value of cash inflows 65,000 45,000 53,000 80,000 Net present value $ 20,000 $ (5,000 ) $ 18,000 $ 20,000 Life of the project 5 years 7 years 6 years 8 years 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. multiple choice D C B A B C A D C A D B A B C D
nformation on four investment proposals is given below: Investment Proposal A B C D Investment required $ (900,000) $ (170,000) $ (90,000) $ (1,430,000) Present value of cash inflows 1,263,600 233,400 136,500 1,908,300 Net present value $ 363,600 $ 63,400 $ 46,500 $ 478,300 Life of the project 5 years 7 years 6 years 6 years 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.
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Information on four investment proposals is given below: 6 years A B Investment required Present value of cash inflows Net present value $ (300,000) 424,800 $ 124,800 $ (140,000) 191,700 $ 51,700 Investment Proposal C $ (100,000) 151,100 $ 51,100 Life of the project 5 years 7 years Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. Investment Profitability Proposal Index Rank Preference ABCD D $ (1,500,000) 2,001,700 $ 501,700 6 years
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The management of Riker Inc. is exploring five different investment opportunities. Information on the five projects under study follow Project Number Investment required Present value of cash inflows at a 10% discount rate Net present value Life of the project Project 1 2 3 4 5 Profitability Index 1 2 3 $(390,000) $(330,000) $(350,000) 478,490 396,950 $ 88,490 $ 66,950 6 years 3 years First preference Second preference 433,190 $ (83,190) 5 years The company's required rate of return is 10%; thus, a 10% discount rate has been used in the preceding present value computations. Limited funds are available for investment, and so the company cannot accept all of the available projects. Third preference Fourth preference Fifth preference 4 $(330,000) Required: 1. Compute the profitability Index for each investment project. (Round your answers to 2 decimal places.) 300, 100 $ 29,900 12 years 5 $(480,000) 562,860 $82,860 6 years 2. Rank the five projects according to preference, in terms of (a)…
Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects Project A 5 years $84,480 $64,000 Project B 5 years $57,300 $50,000 Useful life Present value of cash inflows Present value of cash outflows What is the present value index for Project A?
Solve #1-2
Consider the following investment projects for SDL Engineering. All of the projects have a three-year investment life: Project’s Cash Flow ($) Time (n) Project A Project B Project C Project D 0 -$1,500 -$1,200 -$1,600 -$3,000 1 0 $600 -$1,800 $800 2 0 $800 $800 $1,900 3 $3,000 $1,500 $2,500 $2,300 Compute the Net Present worth of each project where interest rate is 9%. Which project do you recommend based on the NPW? Other than the NPW, why else would you recommend this project? (you will be using the same rate that was for part A for this part. Calculate the IRR for each project Show all workings in excel

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