B. Brooks Inc., which has a hurdle rate of 12%, is considering three different independent investment opportunities. Each project has a seven-year life. The annual cash flows and initial investment for each of the projects are as follows:

	Project A	Project B	Project C
Annual cash flows	$131,470	$120,520	$109,560
Initial investment	320,000	300,000	230,000

PV factor of $1 at 12% for 7 years = 0.4523 PV factor of annuity at 12% for 7 years = 4.5638

a. What is the present value of the annual cash flows for each of the three projects?

b. What is the net present value of each of the projects?

c. Circle less or greater than (or delete the other option) to make the sentence true.

The Internal Rate of Return is LESS than Or GREATER than 12% for Project A.

The Internal Rate of Return is LESS than Or GREATER than 12% for Project B.

The Internal Rate of Return is LESS than Or GREATER than 12% for Project C.

d. What is the profitability index of each of the projects? (Round to two decimal places.)

e. In what order should Brooks prioritize investment in the projects?