Question: A firm has received multiple project requests from different functions its different products for the next financial year. The finance function, through forecasting, has analyzed

A firm has received multiple project requests from different functions its different products for the next financial year. The finance function, through forecasting, has analyzed the cash flow availability next year and allocated Rs 50,00,000 for the new projects. The firm has identified 10 profitable projects which would require a total investment of Rs 69,50,000.

Project Name

Initial Investment

Project 1

11,00,000

Project 2

2,50,000

Project 3

3,70,000

Project 4

6,00,000

Project 5

50,000

Project 6

18,15,000

Project 7

9,00,000

Project 8

10,35,000

Project 9

3,80,000

Project 10

4,50,000

So which projects should the firm choose to maximum the gains and also capital utilization if the discount rate is 10%.

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