A company is contemplating three projects. Here’s what you need to know about them:

i) Requires an initial outlay of $200,000 and generates profits of $70,000/year and then involves disposal fees of $12,000 at the end of the project’s four-year life.

ii) Produces $70,000 in profits per year during its five years. There’s an initial outlay $210,000 and then another investment at the end of the second year of $50,000.

iii) Requires an upfront investment of $225,000 that gives rise to profits of $90,000 year. The project runs for three years, and then has a salvage value at the end of the third year of +25,000.

a) Calculate the NPV for each project, assuming the company is using 10% as its RRR.

b) Calculate the PI for each project.

c) The company has to ration the capital it has available for investing—it only has $450,000 to invest. Which project(s) should they pursue?