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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 investment required present value of cash inflows life of the project (years) internal rate of return a $ 180,000 $ 269,323 7 15% b $ 130,000 $ 242,000 12 20% c $ 100,000 $ 200,035 7 19% d $ 160,000 $ 278,136 3 18% 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.
Sagot :
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