Question: Question 2 (25 marks) (a) Consider the results from analyzing the following five projects: project investment/outlay profitability index AA $300,000 1.033 BB 400,000 1.050 CC

Question 2 (25 marks)

(a) Consider the results from analyzing the following five projects:

project investment/outlay profitability index
AA $300,000 1.033
BB 400,000 1.050
CC 200,000 1.050
DD 100,000 1.100
EE 200,000 0.925

Suppose there is a limit on the capital budget of $600,000. Find the NPV for each project and determine which projects should be invested in,

given that capital budget and what will be the total NPV? (8 marks)

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