Early, Inc Use the Profitability Index to Rank These Investments in Terms

Early, Inc. has chosen four potential investment projects. Listed below are some relevant data on these projects: $\begin{array}{lrr}\text { Project }&\text { Investment }&\text { Net Present Value }\\\hline1 & \$ 125,000 & \$ 62,500 \\2 & 150,000 & 45,000 \\3 & 75,000 & 52,500 \\4 & 112,500 & 45,000\end{array}$ Use the profitability index to rank these investments in terms of preference:

A) 1, 3, 2, 4
B) 2, 1, 4, 3
C) 1, 2, 3, 4
D) 3, 1, 4, 2

Correct Answer:

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