The Carlo Company has been allocated RM600,000 on investment projects for the coming year. Four projects, each with a four-year life and with the following cash flows are currently being considered:

Year	0	1	2	3	4
Project	RMk	RMk	RMk	RMk	RMk
A	-300	100	10	200	200
B	-200	0	0	0	400
C	-100	0	0	80	80
D	-150	60	60	60	60

1. 1. Distinguish between hard and soft capital rationing
2. 2. Assuming that the projects are divisible recommend to the Board, which projects should be accepted using the Net Present Value method and evaluate the total net present value that would be generated
3. 3. Discuss the impact on your analysis of each project being indivisible

Answer rating: 100% (QA)

The optimum investment to match the investors expectations is determined by Net Present Value NPV It ... View the full answer