PRACTICE PROBLEM 1- CAPITAL BUDGETING
Submit your output in pdf format.
Information on four investment proposals is given below:
INVESTMENT
INVESTMENT
PRESENT VALUE
LIFE OF THE
PROPOSSAL
REQUIRED
OF CASH INFLOWS PROJECT
A
P(90,000)
P126,000
5 YEARS
B
P(100,00)
138,000
7 YEARS
C
P(70,000)
105,000
6 YEARS
D
P(120,00)
160,000
6 YEARS
REQUIRED:
1.Compute the project profitability index for each investment proposal.
2. Rank the proposals in terms of preference.