The management of Revco Products is exploring four different investment opportun

Question

The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows:

Project Number

Because the company’s required rate of return is 10%, a 10% discount rate has been used in the present value computations above. Limited funds are available for investment, so the company can’t accept all of the available projects.

Compute the project profitability index for each investment project. (Round your answers to 2 decimal places.)

The management of Revco Products is exploring four different investment opportunities. Information on the four projects under study follows:

Explanation / Answer

1. Profitabity Index: Present value of cash inflows / Investment required

2. Ranking of the projects:

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