Question: Company XYZ has five positive-NPV projects but does not have enough liquidity to take all of them. The investments and the corresponding NPVs are listed

Company XYZ has five positive-NPV projects but does not have enough liquidity to take all of them. The investments and the corresponding NPVs are listed below (unit in million).

Project #

1

2

3

4

5

Investment

4.5

3

2.5

5.5

1

NPV

65

60

28

150

20

In particular, XYZ only has 10 million available for investments. To maximize profit, which projects should be chosen?

a. 3, 4, and 5.

b. 1, 2, and 3.

c. 1 and 4.

d. 2, 4, and 5.

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