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The management of Revco Products is exploring four different Investment opportunitles. Information on the four projects under study follows: Project Number 2 4 Investment required Present value of cash inflowS $(270,e00) 336,140 S(450, 000) 522,970 S(360, eee) 433,400 $ 73,400 $(480, 000) 567, 270 $ 87,270 Net present value $ 66,140 $ 72,970 Life of the project Internal rate of return 6 уеars 18% з уеars 19% 12 years 14% 6 уears 16% The net present values above have been computed using a 10% discount rate. Limited funds are avallable for Investment, so the company can't accept all of the avallable projects. Requlred: 1. Compute the profitability Index for each Investment project. 2. Rank the four projects according to preference, 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 investment project. (Round your answers to 2 decimal places.) Profitability Project Index 1 2 3 4 < Required 1 Required 2 >

The management of Revco Products is exploring four different Investment opportunitles. Information on the four projects under study follows: Project Number 2 4 Investment required Present value of cash inflowS $(270,e00) 336,140 S(450, 000) 522,970 S(360, eee) 433,400 $ 73,400 $(480, 000) 567, 270 $ 87,270 Net present value $ 66,140 $ 72,970 Life of the project Internal rate of return 6 уеars 18% з уеars 19% 12 years 14% 6 уears 16% The net present values above have been computed using a 10% discount rate. Limited funds are avallable for Investment, so the company can't accept all of the avallable projects. Requlred: 1. Compute the profitability Index for each Investment project. 2. Rank the four projects according to preference, 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 investment project. (Round your answers to 2 decimal places.) Profitability Project Index 1 2 3 4 < Required 1 Required 2 >

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The management of Revco Products is exploring four different Investment opportunitles. Information on the four projects under study follows: Project Number 1 2 4 S(450,000) 522,970 $ 72,970 з уеars 19% $(480, 000) 567, 270 $ 87,270 6 years 16% Investment required Present value of cash inflows $(270, e00) 336,140 $(360, eee) 433,400 $ 73,400 Net present value $ 66,140 Life of the project Internal rate of return б уears 18% 12 years 14% The net present values above have been computed using a 10% discount rate. Limited funds are avallable for Investment, so the company can't accept all of the avallable projects. Requlred: 1. Compute the profitability Index for each Investment project. 2. Rank the four projects according to preference, 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 investment project. (Round your answers to 2 decimal places.) Profitability Index Project 1 2 3 4 Required 1 Required 2 >
Transcribed Image Text:The management of Revco Products is exploring four different Investment opportunitles. Information on the four projects under study follows: Project Number 1 2 4 S(450,000) 522,970 $ 72,970 з уеars 19% $(480, 000) 567, 270 $ 87,270 6 years 16% Investment required Present value of cash inflows $(270, e00) 336,140 $(360, eee) 433,400 $ 73,400 Net present value $ 66,140 Life of the project Internal rate of return б уears 18% 12 years 14% The net present values above have been computed using a 10% discount rate. Limited funds are avallable for Investment, so the company can't accept all of the avallable projects. Requlred: 1. Compute the profitability Index for each Investment project. 2. Rank the four projects according to preference, 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 investment project. (Round your answers to 2 decimal places.) Profitability Index Project 1 2 3 4 Required 1 Required 2 >
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