Allied Products has six projects that are potential candidates for selection during the upcoming fiscal year. The table at the bottom of the page provides the expected net present value (NPV) and capital requirements over the next five years for each project. The table also indicates the planned budget expenditures for the entire program during each of the next five years. Which projects should be selected?

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PROJECT 1 234 5 6 R&D Budget NPV (THOUSANDS) $140 $260 $88 $124 $176 $192 YEAR 1 $ 80 $ 95 $ 58 $32 $115 $ 48 $225 CAPITAL REQUIRED (THOUSANDS) YEAR 2 YEAR 3 YEAR 4 $25 $22 $40 $5 $17 $24 $25 $20 $80 $14 $10 $25 $12 $60 $18 $10 $12 $6 $10 $32 $50 PROJECT 1 234 5 6 R&D Budget NPV (THOUSANDS) $140 $260 $88 $124 $176 $192 YEAR 1 $ 80 $ 95 $ 58 $32 $115 $ 48 $225 CAPITAL REQUIRED (THOUSANDS) YEAR 2 YEAR 3 YEAR 4 $25 $22 $40 $5 $17 $24 $25 $20 $80 $14 $10 $25 $12 $60 $18 $10 $12 $6 $10 $32 $50

Answer rating: 100% (QA)

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