Present value ratios index Information about four investment proposals is summarized here:
|
Proposal
|
Investment Required
|
Net Present Value
|
|
1
|
$60,000
|
$36,000
|
|
2
|
24,000
|
9,600
|
|
3
|
72,000
|
36,000
|
|
4
|
72,000
|
14,400
|
Required:
Calculate the present value ratio of each proposal and indicate which proposal is the most desirable investment.