Use the table for the question(s) below.
Consider the following list of projects:

-Assume that your capital is constrained, so that you only have $600,000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total net present value (NPV) for all the projects you invest in will be closest to ________.
A) $65,000
B) $80,000
C) $69,000
D) $111,000

Question

Use the table for the question(s) below.
Consider the following list of projects:
 
-Assume that your capital is constrained, so that you only have $600,000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total net present value (NPV) for all the projects you invest in will be closest to ________.
A) $65,000 
B) $80,000 
C) $69,000 
D) $111,000

Quizplus · Accepted Answer

B) 11ea84dc_f55e_227c_9a63_23d54ba30147_TB1316_00_TB1316_00 This is a tricky problem in which the rankings CBFG seem optimal, but this combination leaves $120,000 on the table uninvested. By replacing G with H the full $600,000 is invested and the NPV of the combination of projects is increased by $11,000. Therefore you should invest in projects C, B, F, and H. NPV = NPV_C + NPV_B + NPV_F + NPV_H = $20,000 + $30,000 + $10,000 + $20,000 = $80,000

Use the Table for the Question(s) Below