QUESTION FOUR (a)With relevant examples, briefly explain when and why profitability index (PI) investme nt technique is preferred to Net Present Value (NPV) investment technique in evaluating i 01/02/201912:24:53 Page 1 of 2 nvestment projects. (b)The management of Mawenya Caterers Ltd attempting to evaluate the feasibility of in vesting shs 1,250,000 in upgrading its bar, kitchen and dining rooms facilities. The sche me is assumed to have a 10-year life, a scrap, or terminal value of nil and expected to inc rease annual net profit by shs 150,000 , after charging annual depreciation of shs 125,00 0 . For a project of this type, management usually prefers a payback period of less than 6 years. Using the cost of capital of 12%, ignoring taxation where appropriate, you are re quired to determine, for the project: (i) Payback period (ii) Net Present Value (iii)Internal Rate of Return (iv)Comment on the financial acceptability of the project