Aspira is a highly geared company that wishes to expand its operations. Six possible capital investments have been identified, but the company only has access to a total of $$620,000.$ The projects may not be postponed until a future period. After the projects end, it is unlikely that similar investment opportunities will occur. Expected investment and net present values are as follows:

Project Investment NPV

A $(246,000)6350$

B $(180,000)1882$

C $(175,000)(2596)$

D $(180,000)8356$

E $(180,000)5490$

F $(150,000)4993$

Projects A and E are mutually exclusive. All projects are believed to be of similar risk to the company$$s existing capital investments. Any surplus funds may be invested in the money market to earn a return of $9\%$ per year. The money market may be assumed to be an efficient market. Aspira$$s cost of capital is $12\%$ per year.

Required:

a$)$ Rank project based on NPV$.$

b$)$Assuming the projects are divisible, calculate the profitability index for each project,and rank the projects to determine how the money would be best invested. Explainbriefly why the rankings differ from that in $($a$)$ above.

c$)$Now assume the projects are indivisible. Provide advise on how the funds are best invested.