QUESTION $4$

$[20$ MARKS$]$

A company in Gaborone has P$40000$ to invest in three projects, either Project A or Project B

or Project $C.$ Each project runs over four years. The expected cash inflows at the end of each

year are displayed in the table:

The required rate of return $($discount rate$)$ is $10\%$ p$.$a$.$

What conclusions can you draw? Are the projects equally profitable? Use the profitability index

$($PI$).$

$(20$ marks$)$