Question 3 20 Marks One of the projects whose cash flows are listed below needs to be chosen. Assume that projects have the same risk. Project A Now -R 16 000 Project B -R 3 200 End-of-year 1 R 10 500 R 3 300 End-of-year 2 End-of-year 3 R 9 100 R 1 260 R 3 000 R 600 Required: 3.1. Calculate the net present value (NPV) and the profitability index (PI) for the two projects. Assumela 10 percent discount rate. (8) 3.2. Which of the projects is better according to each of the two methods? (4) 3.3. What is the explanation for the differences in rankings between the NPV and PI analysis methods? (3) 3.4. Which method is correct? Why? (5)