Information on four investment proposals is given below: A Investment required Net present value. $ (900,000) Present value of cash inflows 1,263,600 $363,600 Life of the project 5 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. B Investment Proposal C $ (90,000) 136,500 $ (170,000) 233,400 $ 63,400 $ 46,500 7 years 6 years D $ (1,430,000) 1,908,300 $478,300 6 years
Information on four investment proposals is given below: A Investment required Net present value. $ (900,000) Present value of cash inflows 1,263,600 $363,600 Life of the project 5 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. B Investment Proposal C $ (90,000) 136,500 $ (170,000) 233,400 $ 63,400 $ 46,500 7 years 6 years D $ (1,430,000) 1,908,300 $478,300 6 years
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 3PB: Net present value method, present value index, and analysis for a service company First United Bank...
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