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A company faces the following investment alternatives Project Capital Investment. Cash Flows from Investment I. $7 million. $1.2 million per year in perpetuity II. $12

A company faces the following investment alternatives

Project Capital Investment. Cash Flows from Investment

I. $7 million. $1.2 million per year in perpetuity

II. $12 million. $1.5 million per year in perpetuity

III. $16 million. $2.2 million per year in perpetuity

IV. $10 million. $1.4 million per year in perpetuity

V. $11 million. $1.6 million per year in perpetuity

If the company's budget is $30 million, use the profitability index to determine the best combination of investments, given a cost of capital of 5 percent.

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