Company Mar a Lago has $ 6,000,000 of available fund for investment during 2021. It has
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Question:
Company Mar –a – Lago has $ 6,000,000 of available fund for investment during 2021. It has five profitable projects under consideration, with the following details:
Project | Initial investment ($) | Present value of cash flows ($) | Net Present value ($) |
A | (200,000) | 240,000 | 40,000 |
B | (600,000) | 670,000 | 70,000 |
C | (100,000) | 132,000 | 32,000 |
D | (400,000) | 450,000 | 50,000 |
E | (200,000) | 260,000 | 60,000 |
Requirement 1: Determine the optimal combination of projects, assuming that projects are divisible.
Requirement 2: Determine the optimal combination of projects, assuming that projects are indivisible.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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