A company has identified a number of promising projects, as indicated in Table 5.7. The cash flows for the first 2 years are shown (they are all negative). The cash flows in later years are positive, and the net present value of each project is shown. The company managers have decided that they can allocate up to $\$ 250,000$ in each of the first 2 years to fund these projects. If less than $\$ 250,000$ is used the first year, the balance can be invested at $10 %$ and used to augment the next year's budget. Which projects should be funded?

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TABLE 5.7 A LIST OF PROJECTS Cash flow Project 1 2 NPV 12 -90 -58 150 -80 -80 200 3 -50 -100 100 4 -20 -64 100 597 -40 -50 120 6 -80 -20 150 -80 -100 240