Capital rationing Management of Frisco Films is considering the following capital projects: Project Annual After-Tax Cash Flows Number of Years New film studios Cost $24,000,000 Cameras and equipment 3,840,000 Land improvement 6,000,000 Motion picture #1 21,360,000 Motion picture #2 13,680,000 Motion picture #3 Corporate aircraft 9,600,000 2,880,000 $3,720,000 15 960,000 8 1,416,000 10 5,964,000 5 4,704,000 4 2,760,000 7 924,000 5 Assume that all projects have no salvage value and that the firm uses a discount rate of 10 percent. Management has decided that only $30,000,000 can be spent in the current year for capital projects. a. Use Excel to determine the net present value, profitability index, and internal rate of return for each of the seven project. Note: Round NPV (final answer) to the nearest whole dollar. Note: Round PI to two decimal places (i.e. round 1.466 to 1.47). Note: Round IRR percentage to one decimal place (i.e. round 8.555% to 8.6%). Project Name NPV Film studios $ Cameras & equipment Land improvement Motion picture #1 Motion picture #2 Motion picture #3 PI IRR % % % % % % % Corporate aircraft b. Rank the seven projects according to each method used in (a). NPV PI IRR 1 = 2 3 4 = 5 6 = 7