Exercise 12-11 (Algo) Preference Ranking of Investment Projects [LO12-5]Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selectedinformation on the four projects follows:ProjectABCDInvestmentRequired$ 130,000$ 136,000$ 105,000$ 169,000Presentvalue ofCash Inflows$ 249,323$ 222,000$ 180,035$ 258, 136Required 1 Required 2ProjectLife oftheProject(years)7The net present values should be computed using a 10% discount rate. The company wants your assistance in determining whichproject to accept first, second, and so forth.ABC12Required: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.73Complete this question by entering your answers in the tabs below.ProfitabilityIndexInternalRate ofReturn20%18%19%17%Compute the profitability index for each project. (Round your answers to 2 decimal places.)< Required 1Required 2 >

Solution:-1)Computation of the profitability index for each project as follows under:-Profitability…

Answered: Oxford Company has limited funds…

EBK CFIN

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ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 19PROB

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Exercise 14-11 (Algo) Preference Ranking of Investment Projects [LO14-5] 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 $ 180,000 $ 224,323 7 21% B $ 151,000 $ 197,000 12 18% C $ 102,000 $ 155,035 7 17% D $ 161,000 $ 233,136 3 16% 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.
Preference Ranking of Investment Projects 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 Net Present Value Life of the Project (years) Internal Rate of Return (percent) A $160,000 44,323 7 18% B $135,000 42,000 12 16% C $100,000 35,035 7 20% D $175,000 38,136 3 22% 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.
Exercise 14-5 (Algo) Preference Ranking [LO14-5] Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Required: Investment Profitability Proposal Index A B C D A $ (60,000) 88,600 $ 28,600 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. Rank Preference 5 years Investment Proposal C $ (110,000) 168,600 $ 58,600 B $ (190,000) 260,600 $ 70,600 7 years 6 years D $(2,660,000) 3,551,000 $ 891,000 6 years
Self-Study Problem 10.02 a1-a2 (Part Level Submission) Cullumber Crafts Corp. management is evaluating two independent capital projects that will each cost the company $250,000. The two projects will provide the following cash flows: Year Project A Project B 1 $88,750 $26,450 91,450 80,125 30,235 145,250 4 139,655 88,110 (a1) X Your answer is incorrect. Try again. What is the payback period of both projects? (Round answers to 2 decimal places, e.g. 15.25.) The Payback of Project A is years and Project B is years.
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
Exercise 14-5 (Algo) Preference Ranking [LO14-5] Information on four investment proposals is given below: Investment required Present value of cash inflows Net present value Life of the project Investment Profitability Proposal Index A BUD В с D $ (280,000) 393,900 $ 113,900 Required: 1. Compute the profitability index for each investment proposal. (Round your answers to 2 decimal places.) 2. Rank the proposals in terms of preference. Rank Preference. 5 years Investment Proposal C $ (50,000) 78,100 $28,100 B $ (140,000) 192,800 $ 52,800 7 years 6 years D $ (780,000) 1,038, 100 $ 258, 100 6 years.
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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: 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
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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

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