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Information on four investment proposals is given below:
| | Investment Proposal |
| A | B | C | D |
| Investment required | $ (120,000) | | $ (180,000) | | $ (30,000) | | $ (1,560,000) | |
| Present value of cash inflows | 172,000 | | 250,000 | | 48,600 | | 2,081,000 | |
| Net present value | $ 52,000 | | $ 70,000 | | $ 18,600 | | $ 521,000 | |
| Life of the project | 5 | years | 7 | years | 6 | years | 6 | years |
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.
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