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![Exercise 13-5 Preference Ranking [LO13-5] Information on four investment proposals is given below: nvestment Proposal Investment required (130,000) (140,000) $(150,000) (1,260,000) Present value of cash inflows Net present value Life of the project 185,600 193,800 228,600 1,681,100 421,100 6 years $ 55,600 53,800 $ 78,600 5 years 7 years 6 years Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.) Project Investment Profitability Proposal Index](https://media.cheggcdn.com/media%2F599%2F5995fd5a-63fe-4d23-880f-6e8184ded5a7%2Fimage)
Information on four investment proposals is given below: Required: 1. Compute the project profitability index for each investment proposal. (Round your answers to 2 decimal places.)
Expert Answer
| Project profitability index = Present value of cash inflows/Investment required | |||
| 1 | |||
| Investment proposal | Project profitability index | ||
| A | 1.43 | =185600/130000 | |
| B | 1.38 | =193800/140000 | |
| C | 1.52 | =228600/150000 | |
| D | 1.33 | =1681100/1260000 | |
