Question $4$

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:

Project Project B Project C

Year $1$: $15000$ Year $1$: $13000$ Year $1$: $10000$

Year $2$: $20000$ Year $2$: $11000$ Year $2$: $9000$

Year $3$: $12000$ Year $3$: $14000$ Year $3$: $15000$

Year $4$: $10000$ Year $4$: $21000$ Year $4$: $14000$

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$)$