You are the finance manager for Monkey Manufacturing Company. You have identified 5 new projects that you are considering for the next financial year. The results of your analysis are presented in the table below:

Project Initial Investment Payback Period Net Present Value Internal Rate of return Profitability Index

($million) (years) ($million) (%)

A 20 2.5 13.8 12.2

B 10 3.1 7.1 12.5

C 5.00 4.2 3.4 12.3

D 5.00 2.9 3.0 11.9

E 5.00 3.4 3.7 12.8

a)Calculate the profitability index for each investment

b)Which project or projects would you approve if yourcapitalexpenditure budget is $25 million?

c)If you have unlimited funds to invest, which project or projects would you approve?

d)How would your answer to Question Cchangeif projects C, D, and E are mutually exclusive?