ABC Company has the following list of projects. The company has only $1,500,000 available for investment....
ABC Company has the following list of projects. The company has only $1,500,000 available for investment. Which projects should the company undertake? Why? Projects Initial Investment
A) initial investment is 750,000, NPV 75,000
B )Initial investment 1,000,000 , NVP 250,000
C )initial investment 750,000 ,NVP 50,000
D )initial investment 500,000 NVP 90,000
E )initial investment 500,000 , NVP 100,000
Homework Answers
Project (B) and (E) have the highest NPVs at 250000 and 100000 respectively. Further, the initial investments of the two projects combined exactly match the total investment capital available worth $ 1500000.No other project combination provides a higher NPV within the available capital constraint
Hence, the correct options are (B) and (E).
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