Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: ProjectInvestment
RequiredPresent
Value of Cash InflowsLife of
the
Project
(years)Internal
Rate
of Return
A$170,000$329,323712%
B$118,000$302,0001217%
C$105,000$260,035716%
D$165,000$338,136315%

The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth.

Required:

1. Compute the profitability index for each project.

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

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.

Required:

1. Compute the net present value that Kathy earned on her investment in Malti Company stock.

2. Did the Malti Company stock provide a 8% retur