Vishnu Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selectedinformation on the four projects follows:InvestmentPresentValue ofLife oftheProjectInternalRateProjectRequiredCash Inflows(years)of ReturnA$ 130,000$ 249,323720%B$ 136,000$ 222,000CD.$ 105,000$169,000$ 180,035$ 258,136127318%19%17%The net present values should be computed using a 10% discount rate. The company wants your assistance. in determining whichproject 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.

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Answered: Oxford Company has limited funds…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 11P

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