Capital rationing Management of Frisco Films is considering the following capital projects:

Project	Cost	Annual After-Tax Cash Flows	Number of Years
New film studios	$16,000,000	$2,480,000	15
Cameras and equipment	2,560,000	640,000	8
Land improvement	4,000,000	944,000	10
Motion picture #1	14,240,000	3,976,000	5
Motion picture #2	9,120,000	3,136,000	4
Motion picture #3	6,400,000	1,840,000	7
Corporate aircraft	1,920,000	616,000	5

Assume that all projects have no salvage value and that the firm uses a discount rate of 10 percent. Management has decided that only $20,000,000 can be spent in the current year for capital projects. a. Use Excel to determine the net present value, profitability index, and internal rate of return for each of the seven project. Note: Round NPV (final answer) to the nearest whole dollar. Note: Round PI to two decimal places (i.e. round 1.466 to 1.47). Note: Round IRR percentage to one decimal place (i.e. round 8.555% to 8.6%).

Project Name	NPV	PI	IRR
Film studios	Answer	Answer	Answer
Cameras & equipment	Answer	Answer	Answer
Land improvement	Answer	Answer	Answer
Motion picture #1	Answer	Answer	Answer
Motion picture #2	Answer	Answer	Answer
Motion picture #3	Answer	Answer	Answer
Corporate aircraft	Answer	Answer	Answer

b. Rank the seven projects according to each method used in (a).

	NPV	PI	IRR
1	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft
2	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft
3	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft
4	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft
5	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft
6	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft
7	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft	AnswerFilm studiosCameras & equipmentLand improvementMotion picture 1Motion picture 2Motion picture 3Corporate aircraft