Hello,

Can you please solve this?

C1: Evaluate the following projects, using the profitability index. Assume a cost of capital of 12% [SK1: 10 marks] Initial Cash Outflow Year 1 Cash flow Year 2 Cash flow Year 3 Cash flow Project M -$195,000 17,250 95,250 142,500 Project N -$375,000 240,000 142,500 112,500 What is the profitability index for each project? (6 marks) If the projects are independent, which would you accept according to the profitability index criterion? (2 mark) If these projects are mutually exclusive, which would you accept according to the PI criterion? (2 mark)