c$)$ The Selangor state government is seeking a proposal to take over the maintenance of

dilapidated low$-$cost flats in Petaling Jaya. A proposal in Table $2$ by its state$-$owned firm has

tabulated net costs and net benefits in monetary value for a $7-$year program to improve the

tenants' condition. The financing rate is assumed to be $8\%,$ and the salvage value is RM $3\mathrm{.}2$

million.

Table $2$

Based on the tabulated details, determine profitability index of the program.

ii$)$ How will the profitability index change if the net cost in year one $(1)$ increases by $30\%$

from the initial estimated amount?

iii$)$ Advise the client whether funding the program is worth it$.$