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nformation on four investment proposals is given below:
| | | Investment Proposal | |
| | A | B | C | D |
| Investment required | $ | (120,000 | ) | $ | (50,000 | ) | $ | (50,000 | ) | $ | (360,000 | ) |
| Present value of cash inflows | | 169,200 | | | 67,300 | | | 79,000 | | | 476,000 | |
| Net present value | $ | 49,200 | | $ | 17,300 | | $ | 29,000 | | $ | 116,000 | |
| Life of the project | | 5 years | | | 7 years | | | 6 years | | | 6 years | |
| |
Required:
1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.)
2. Rank the proposals in terms of preference.
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