Need complete and correct answer with full working without copy paste answer in text Information on four investment proposals is given below:Investment requiredPresent value of cash inflowsNet present valueLife of the projectAnswer is complete but not entirely correct.InvestmentProposalABCDProfitabilityIndexRankPreference0.40 Second0.38 Third0.53 X First0.33 X FourthA$ (420,000)589,700$ 169,7003333Required:1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.)2. Rank the proposals in terms of preference.✓5 yearsInvestment ProposalB$ (200,000)276,400$ 76,4007 years$ (170,000)259,700$ 89,7006 yearsD$ (2,400,000)3,203,000$ 803,0006 years

Profitability index is the one of the capital budgeting method and can be calculated as the ratio of…

Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project $ (420,000) 589,700 $ 169,700 5 years Investment Proposal C $ (170,000) 259,700 $ 89,700 B $ (200,000) 276,400 $ 76,400 7 years 6 years D $ (2,400,000) 3,203,000 $ 803,000 Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. 6 years

Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project $ (420,000) 589,700 $ 169,700 5 years Investment Proposal C $ (170,000) 259,700 $ 89,700 B $ (200,000) 276,400 $ 76,400 7 years 6 years D $ (2,400,000) 3,203,000 $ 803,000 Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. 6 years

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 1CMA

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