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Information on four Investment proposals is glven below: Investment Proposal A B Investment required Present value of cash inflows $(390, 000) $(30,e00) $(48,000) S(600,000) 41,000 800, 000 64,100 $ 161,000 $ 11,000 $ 24,100 $ 200,000 7 years 551,000 Net present value Life of the project 5 years 6 years 6 years Requlred: 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 Proposal Rank Preference Index A B D

Information on four Investment proposals is glven below: Investment Proposal A B Investment required Present value of cash inflows $(390, 000) $(30,e00) $(48,000) S(600,000) 41,000 800, 000 64,100 $ 161,000 $ 11,000 $ 24,100 $ 200,000 7 years 551,000 Net present value Life of the project 5 years 6 years 6 years Requlred: 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 Proposal Rank Preference Index A B D

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Information on four Investment proposals is glven below: Investment Proposal A B Investment required Present value of cash inflows $(390, 000) $(30,e00) $(48,000) S(600,000) 41,000 800, 000 64,100 $ 161,000 $ 11,000 $ 24,100 $ 200,000 7 years 551,000 Net present value Life of the project 5 years 6 years 6 years Requlred: 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 Proposal Rank Preference Index A B D
Transcribed Image Text:Information on four Investment proposals is glven below: Investment Proposal A B Investment required Present value of cash inflows $(390, 000) $(30,e00) $(48,000) S(600,000) 41,000 800, 000 64,100 $ 161,000 $ 11,000 $ 24,100 $ 200,000 7 years 551,000 Net present value Life of the project 5 years 6 years 6 years Requlred: 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 Proposal Rank Preference Index A B D
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