As it currently stands, investment 7 in the Tatham capital budgeting model has the lowest ROI, 10%.

Question:

As it currently stands, investment 7 in the Tatham capital budgeting model has the lowest ROI, 10%. Keeping this same ROI, can you change the cash requirement and NPV for investment 7 in such a way that it is selected in the optimal solution? Does this lead to any general insights? Explain.

Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...