Oxford Company has limited funds available for investment and must ration the funds among five competing...

Oxford Company has limited funds available for investment and must ration the funds among five competing projects. Selected information on the five projects follows:

Project	Investment Required		Net Present Value			Life of the Project (years)
A	$	480,000	$	132,969			7
B		405,000		126,000			12
C		300,000		105,105			7
D		525,000		114,408			3
E		450,000		(26,088	)		6

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, which to accept second, and so on.

Required:
1.	Compute the profitability index for each project. (Round your answers to 2 decimal places.)

2.	In order of preference, rank the five projects in terms of (a) net present value, (b) profitability index.

Expert Solution

ekkarill92 answered 10 months ago

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