Project A and project B both require an initial investment of $100 and have a 5-year life. Information regarding both projects is presented in the table below:

Project A

NPV = $43

PI = ?

IRR = 24%

Project B

NPV= $47

PI=1.47

IRR=21%

a) Calculate the Profitability Index (PI) for project A. (2 marks)

b) If project A and B are independent, which project/projects would be accepted? Why? (2 marks)

c) If project A and B are mutually exclusive, which project/projects would be accepted? Why? (2 marks)