fnvestment Management UGog9 BA Lecture 5 : Choosing the Capital Expenditure Program when Resources are Limited Question 1 Tiger 5 AOG has the following projects: The company has only OMR 1.250000 available at year 0 . There is no other imvestment opportunity for the firm with any spare cash which is not invested in the above four projects. Required: a) Rank the projects based on the Profitability Index and make recommendations on initial findings. b) Calculate the maximum possible NPV as per the initial ranking assuming that all projects are infinitely divisible. c) When the projects are not infinitely divisible, Calculate the Weighted Average Profitability index (WAPI) separately for the following options: 1. (Q+R) ii. (Q+S) iii. (Q+S+T) iv. (R+5) d) Select the best option from the part-C above with your justifications and comments. Note: WAPI of 1 number of investments with each of having PI and j amount of unused cash balance is: i=1NWi,Pli+Wj