Question: 5. The assumption underlying the above analyses is a linear relationship between project size and profitability. However, the assumption is questionable and deserves further investigation.

5. The assumption underlying the above analyses is a linear relationship between project size and profitability. However, the assumption is questionable and deserves further investigation. Utilize the existing data, classify projects by size into three groups (small, medium, and large), and calculate their profitability. Comment on the linearity assumption and discuss how you would revise your response to requirement 3. (25 marks)

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