Mohawk Enterprises is considering the following investment opportunities.

If Mohawk€™s cost of capital is 15% and its capital budget is limited to $90,000, which projects should it choose?

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Profit for year ($) Project Initial investment (S) 30,000 36,000 18,000 22,000 28,000 20,000 Year 1 Year 2 Year 3 Year 4 12,000 9000 8000 20,000 10,000 0 26,000 6000 23,000 10,000 4,000 0 20,000 2500 11,000 0 17,000 7000 10,000 11,000 18,000