Oxford Company has limited funds available for investment and must ration the fu
ID: 2396777 • Letter: O
Question
Oxford 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, second, and so forth.
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows:
Required places.) Profitability ProjectIndex 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Project Internal Rate Net Present Profitability of Return Index Value First preference Second preference Third preference Fourth preferenceExplanation / Answer
Project Investment NPV Present Value of Inflow PI = PV of Inflows/ Investment A 880000 434360 1314360 1.49 B 685000 371170 1056170 1.54 C 580000 223220 803220 1.38 D 780000 165060 945060 1.21 NPV PI IRR First Preference A B A Ssecond Preference B A D Third Preference C C C Fourth Preference D D B
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