2. The head of the automotive division of Alpha Venture has been allocated a budget of $1M and faces the following five (non-mutually exclusive) projects. The opportunity cost of capital is 10%. The cash-flows are in thousands of dollars. (20 points) Time 0 Project 1 -300 150 Project 2 -300 150 Project 3 -250 150 Project 4 -250 Project 5 -200 120 150 100 1500 (a) Calculate the NPV and IRR of each project. Are all five projects worth considering? (5 points) (b) Since the cash-flows from year 1 on are positive for all projects, the NPV and IRR rules agree. However, the head of the automotive division should not use the IRR rule to select the set of projects. Explain why. (10 points) (c) Explain which set of projects the automotive division should pursue. You may calculate the profitability index, defined as PI = NCV (5 points)