Final answer:
Without specific cash flow data or time frames, we cannot calculate the profitability index for the projects. The profitability index shows the ratio of the present value of future cash flows to the investment cost and helps rank investments by this measure, but does not account for other factors like risk or strategic goals.
Step-by-step explanation:
To calculate the profitability index for each project when the opportunity cost of capital is 11 percent, we would need to find present values for the expected returns of each project. However, you have not provided specific cash flows or time frames for the projects in the information, so I cannot accurately calculate the profitability index for these projects.
The profitability index is a ratio that compares the present value of future cash flows from an investment to the cost of the investment. A profitability index higher than 1 implies that the net present value (NPV) of future cash flows is greater than the initial investment cost, while a profitability index below 1 suggests the opposite.
The profitability index could potentially help rank the projects if we could calculate it. Whether the profitability index ranks the projects 'correctly' depends on what is meant by 'correctly.' Ranking based on profitability index takes into account the present value of future cash flows relative to project cost, which is a common method, but it might not account for other factors such as strategic alignment, risk levels, or individual project timelines.