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PROBLEM 13 18 Preference Ranking of Investment Project LO4 Yancey Company has limited funds available for investment and must ration the funds among four competing projects Selected information

PROBLEM 13–18 Preference Ranking of Investment Projects [LO4]

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

 

 

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 forth. The company’s investment funds are limited.

Required:

1.       Compute the project profitability index for each project.

2.       In order of preference, rank the four projects in terms of:

a.       Net present value.

b.       Project profitability index.

c.        Internal rate of return.

3.       Which ranking do you prefer? Why?

Jun 28 2020 View more View Less

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