a) Mike Wallace is interested in determining the NPV perpetuity of the following project. Answer to the nearest cent. (2 Marks) Show all workings.

NPV = -12,500

Interest rate = 11%

Number of years of the project: 6

b) Mike Wallace is interested in determining the EAC of the following project. Answer to the nearest cent. (2 Marks) Show all workings.

NPV = -12,000

Interest rate = 8%

Number of years of the project: 7

c) The following information was presented to you by your finance manager as they are trying to determine which projects the firm should invest in.

Project	NPV	PV of future CFs	Initial Investment
A	42000	62000
B		92000	18000
C	22000		8000
D	31000	42000
E	41000		12000

The finance manager has just $30,000 to invest. Which Projects should the finance manager choose based on profitability index? Write these in the order of preference. (5 Marks)

d) If a finance manager has decided not to implement capital rationing it is best described as (circle the best answer) (1 Mark)

Soft Capital Rationing Hard Capital Rationing Cannot Say