Yancey Company has limited funds available for investment and must ration the fu

Question

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.

In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return.

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

Explanation / Answer

Profitability index

= Net present value/ investment

B)

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