Manchester Plc. is evaluating five property projects, A, B, C, D and E. The company plans to buy the properties today and sell them in four (4) years from today.

The following table summarizes the initial cost and the expected sale price for each property, as well as the appropriate annual discount rate based on the risk assessment of each project.

Project	Cost Today (t=0)	Discount rate	Expected Sale Price in Year 4 (t=4)
A	2,000,000	10%	13,000,000
B	9,000,000	10%	50,000,000
C	7,000,000	10%	44,000,000
D	3,000,000	5%	22,000,000
E	6,000,000	5%	33,000,000

Manchester Plc. has a total capital budget of 9,000,000 to invest in properties.

a) What is the Internal Rate of Return (IRR) of each project?

b) What is the Net Present Value (NPV) of each project?

(10 marks)

c) What is the Profitability Index (PI) of each project?

d) Given its budget of 9,000,000, which project(s) should Manchester Plc. select and why?

e) Explain why the Profitability Index method could not be used if the budget were 10,000,000 instead. Which project(s) should Manchester plc. select in this case, assuming that unused capital cannot be invested elsewhere?

Clearly show the details of your workings when answering each part.

Please, type it, as it is hard to understand handwriting.