An investor has a budget of $25 million. He can invest in the projects shown below. If the cost of capital is 10%, what investment or investments should he make? Initial Investment Cash Flows (starting at the end of year 1) Project A $17.5 million $10 million per year for 3 years Project B $12.5 million $5 million per year for 6 years Project C $15 million $7.5 million per year for 3 years Project D $10 million $3.75 million per year for 8 years Hint: Calculate the profitability index of each project. Profitability index = NPV/Investment. Project A Project B Projects C and D Projects B and D