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The firm is planning to invest up to 65 million next year. The information about the available investment projects is given in the table below.

The firm is planning to invest up to 65 million next year. The information about the available investment projects is given in the table below.

Project

Initial investment, millions of

Internal rate of return

Net present value,

millions of

Profitability index

A

50

15%

12

B

35

19%

15

C

30

28%

42

D

25

26%

1

E

15

20%

10

F

10

37%

11

G

10

25%

13

H

1

18%

0.1

Assuming the projects are not divisible, use the profitability index(PI) as a criterion to determine the value-maximizing combination of projects. Show the calculations of the profitability indexes in the final column of the table.

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