Question: use Excel sheets (answer all 3 Question please ) d. Calculate the profitability Index (PI) for each project. e. Summarize the preferences dictated by each

 use Excel sheets (answer all 3 Question please ) d. Calculate

use Excel sheets (answer all 3 Question please )

d. Calculate the profitability Index (PI) for each project.

e. Summarize the preferences dictated by each measure you calculated, and indicate which project you would recommend. Explain why

f. Draw the net present value profiles for these projects on the same set of axes, and explain the circumstances under which a conflict in rankings might exist

All techniques with NPV profile: Independent projects (LO# 3) Fitch Industries is in the process of choosing among five equal-risk, independent capital expenditure projects. The relevant cash flows for each project are shown in the following table. The firm's cost of capital is 14%. Project A Project B Project C Project D Project E Initial investment (CFO) $26,000 $500,000 $170,000 $950,000 $80.000 Year (0) Cash inflows (CFO) 1 $4,000 $100,000 $20,000 $230,000 SO 2 4,000 120,000 19,000 230,000 0 3 4,000 140,000 18,000 230,000 0 4,000 160,000 17,000 230,000 20,000 5 4,000 180,000 16,000 230,000 30,000 6 4,000 200,000 15,000 230,000 0 7 4,000 14,000 230,000 50,000 8 4,000 13,000 230,000 60,000 9 4,000 12,000 70,000 10 4.000 11.000

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