ii. The following investment opportunities are available to an investment center manager:

Required: a. If the investment manager is currently making a return on investment of 16 percent, which project(s) would the manager want to pursue? (5 marks) b. If the cost of capital is 10 percent, calculate the Residual Income of each project and determine which project(s) should be chosen? (5 marks) c. Suppose only one project can be chosen, which project should be chosen? Provide justification (2 marks)

Project A B D Initial Investment $ 800,000 100,000 300,000 400,000 Annual Earnings $ 90,000 20,000 25,000 60,000