Question $7$

Imperial Systems has R$1$ milion available for capital investments during the current year. A list

of possible investment projects, together with their net investments and net present values, is

provided in the following table:

$7\mathrm{.}1.$ Rank the various investment projects in terms of their profitability indexes $($calculate to

three decimal places$).$

$7\mathrm{.}2.$ In order of decreasing profitability index values and considering the capital constraints,

which projects should be adopted? Are all capital funds expended?

$7\mathrm{.}3.$ Is there another combination that produces a higher aggregate net present value than

the one developed in part $6\mathrm{.}2?$

$7\mathrm{.}4.$ If less than the entire amount of awailable funds is invested, what is the opportunity

cost of unused funds?