Oxford Company has limited funds available for investment and must ration the funds among the four competing projects shown below: Life of Project Investment Required Present Value of the Project Internal Rate Cash Inflows (years) of Return A $ 200,000 $ 279,323 7 16% B $ 152,000 $ 252,000 12 21% C $ 100,000 $ 210,035 7 D $ 170,000 $ 288,136 3 20% 19% The net present values above have been computed using a 10% discount rate. Required: 1. Compute the profitability index for each project. 2. In cider of preference, rank the four projects 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 project. Note: Round your answers to 2 decimal places. Profitability Project Index A B C D < Prev 8 of 9 Next >
Oxford Company has limited funds available for investment and must ration the funds among the four competing projects shown below: Life of Project Investment Required Present Value of the Project Internal Rate Cash Inflows (years) of Return A $ 200,000 $ 279,323 7 16% B $ 152,000 $ 252,000 12 21% C $ 100,000 $ 210,035 7 D $ 170,000 $ 288,136 3 20% 19% The net present values above have been computed using a 10% discount rate. Required: 1. Compute the profitability index for each project. 2. In cider of preference, rank the four projects 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 project. Note: Round your answers to 2 decimal places. Profitability Project Index A B C D < Prev 8 of 9 Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A5
Transcribed Image Text:Oxford Company has limited funds available for investment and must ration the funds among the four competing projects shown
below:
Life of
Project
Investment
Required
Present
Value of
the
Project
Internal
Rate
Cash Inflows
(years)
of Return
A
$ 200,000
$ 279,323
7
16%
B
$ 152,000
$ 252,000
12
21%
C
$ 100,000
$ 210,035
7
D
$ 170,000
$ 288,136
3
20%
19%
The net present values above have been computed using a 10% discount rate.
Required:
1. Compute the profitability index for each project.
2. In cider of preference, rank the four projects 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 project.
Note: Round your answers to 2 decimal places.
Profitability
Project
Index
A
B
C
D
< Prev
8 of 9
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