Which of the following proposed projects should be accepted for the upcoming year since only $6 million is available for the next year's capital budget. What is the total NPV of the projects that should be accepted?
A) A, B, & F; total cost = $5.5 million; Total NPV = $1.57
B) F, B, & D; total cost = $6 million; Total NPV = $1.72
C) E, F, & D; total cost = $5.5 million; Total NPV = $1.45
D) A, E, & F; total cost = $5 million; Total NPV = $1.3

Question

Which of the following proposed projects should be accepted for the upcoming year since only $6 million is available for the next year's capital budget. What is the total NPV of the projects that should be accepted? 
A) A, B, & F; total cost = $5.5 million; Total NPV = $1.57 
B) F, B, & D; total cost = $6 million; Total NPV = $1.72 
C) E, F, & D; total cost = $5.5 million; Total NPV = $1.45 
D) A, E, & F; total cost = $5 million; Total NPV = $1.3

Quizplus · Accepted Answer

The projects that should be accepted are F, B, and D because they have the highest total NPV ($1.72 million) and their total cost of $6 million fits within the available budget. While the other options also have positive NPVs and fit within the budget, they do not have as high of a total NPV as option B.

Which of the Following Proposed Projects Should Be Accepted for the Upcoming