Information on four investment proposals is given below: Investment Proposal B C A Investment required R (90,000) 126,000 R36,000 R (100,000) 138,000 R (70,000) 105,000 Present value of cash inflows Net present value R38,000 R35,000 Life of the project 5 years 7 years Required: 1.1. Calculate the project profitability index for each proposal. 1.2. Rank the proposals in terms of preference. Question 2 16 Marks Miller Company's most recent contribution format income statement is shown below: Total Per Unit Sales (20,000 units) R300,000 R15.00 Variable expenses 180,000 9.00 Contribution margin 120,000 R6.00 Fixed expenses 70,000 Net operating income R50,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): 2.1. The number of units sold increases by 15% 2.2. The selling price decreases by R1.50 per unit, and the number of units sold increases by 25%. 16 APMFN12 2022 2.3. The selling price increases by R1.50 per unit, fixed expenses increase by R20,000, and the number of units sold decrease by 5%. 2.4. The selling price increases by 12%, variable expenses by 60 cents per unit, and the number of units sold decreases by 10%. 8 Marks D R (120,000) 160,000 R40,000 6 years