Oxford Company has limited funds available for investment and must ration the funds among four competingprojects. Selected information on the four projects follows:PresentValue ofLife oftheProjectAInvestmentRequiredCashInflowsProjectInternalRate(years)of Return$ 160,000 $ 259,323716%B$ 135,000 $ 232,0001218%$ 100,000 $ 190,0357D$ 164,000 $ 268,136322%17%The net present values should be computed using a 10% discount rate. The company wants your assistance indetermining which project to accept first, second, and so forth.Required:1. Compute the profitability index for each project.2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate ofreturn.Complete this question by entering your answers in the tabs below.Required 1 Required 2In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.Net PresentValueProfitabilityIndexInternal Rateof ReturnFirst preferenceSecond preferenceThird preferenceFourth preference

Step 1: The calculation of the Profitability index and NPV ABCDEF1ProjectsInvestmentPV of cash…

Answered: Oxford Company has limited funds…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Project InvestmentRequired NetPresentValue Life oftheProject(years) InternalRateof Return A $ 870,000 $ 576,770 9 25 % B $ 755,000 $ 308,594 14 17 % C $ 720,000 $ 442,949 9 24 % D $ 920,000 $ 145,122 5 16 % The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. REQUIRED 1 Project Project Profitability Index A B C D
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of the Present Project Net Internal Investment Rate Value $576,770 $755,000 ș308,594 $720,000 $442,949 $920,000 $145,122 Project Required (years) of Return 9 A $870,000 25% в 14 178 9 248 D 168 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Profitability Project Index A В D
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Project InvestmentRequired PresentValue of Cash Inflows Life oftheProject(years) InternalRateof Return A $ 160,000 $ 259,323 7 16 % B $ 135,000 $ 232,000 12 18 % C $ 100,000 $ 190,035 7 22 % D $ 164,000 $ 268,136 3 17 % The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return.
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Oxford Company has limited funds available for investment and must ration the funds among the four competing projects shown below: Project Required A Inflows $ 120,000 $ 239,323 $ 133,000 $ 212,000 $ 102,000 $ 170,035 $ 172,000 $ 248,136 The net present values above have been computed using a 10% discount rate. Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. B Present Investment Value of Cash C D Required 1 Required 2 Life of the Project (years) 7 12 7 Complete this question by entering your answers in the tabs below. Project A Compute the profitability Index for each project. Note: Round your answers to 2 decimal places. 3 Profitability Index Internal Rate of Return 20% 22% 19% 21% Prev 5 of 5 www Next

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