Oppton plc's managers are ambitious and wish to expand their range of activities. They have produced a report for the parent company's board of directors detailing five projects requiring large initial investments. After reading the report the main board directors say that they have a policy of permitting subsidiary managers to select investment projects without head office interference. However, they do set a limit on the amount spent in any one period. In the case of Oppton this limit is to be £110,000 at Time 0 for these projects, which if accepted will commence immediately. The five projects are not mutually exclusive (that is, taking on one does not exclude the possibility of taking on another), each one can only be undertaken once and they are all divisible.
The cash flow details are as follows:

None of the projects lasts more than four years and cash flows are confined to within the four-year horizon.
Assume
- The cost of capital is 10 per cent.
- No inflation.
- No tax.
- All cash flows occur on anniversary dates.
What is the optimal allocation of the £110,000 and the resulting net present value?

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Point in time (yearly intervals) 0 (E000) -35 (E000) (E000) (E000) (E000) Project I Project 2 Project 3 Project 4 Project 5 30 10 15 30 TO 15 10 15 10 15