Question: b) Hawk plc has the following projects in which it can invest: Project NPV at t=0, m Cash outflow at t=0, m 10 13 3.8

b) Hawk plc has the following projects in which it can

b) Hawk plc has the following projects in which it can invest: Project NPV at t=0, m Cash outflow at t=0, m 10 13 3.8 5.0 4.8 Present value at t=0 of cash inflows, m 19 38 A B C D E 7.3 9 25 3.5 4.9 2.3 9.9 7.1 Hawk has no other investment opportunities. Projects C and D are mutually exclusive. The capital investment budget at t=0 is limited to 25 million. Hawk plc is committed to maximising the wealth of its shareholders. How should Hawk utilise its capital investment budget if: (0) (ii) all projects are divisible (can be scaled down)? all projects are indivisible? (4 marks) (4 marks)

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