Expand and then solve the capital budgeting model in Figure 6.5 so that 20 investments are now possible. You can make up the data on cash requirements, NPVs, and the budget, but use the following guidelines:

• The cash requirements and NPVs for the various investments can vary widely, but the ROIs should be between 10% and 15% for each investment.

• The budget should allow somewhere between 5 and 10 of the investments to be selected.

Figure 6.5

Transcribed Image Text:

A B D. G H 1 Capitalbudgeting model Range names used Budget =Model!$D$14 3 Input data on potential investments ($ millions) 4 Investrment 5 ICost Decisions =Modell$B$10:SH$10 Total cost =Modell$B$14 Total_NPV =Modell$B$17 2 4 $5.0 $4 5 $2.4 $2.7 $3.5 $5.9 $6.9 $3.0 6 NPV $5.6 $5.1 13.3% $3.9 $6.8 $7.7 $3.3 7 ROI 12.0% 12.5% 11.4% 15.3% 11.6% 10.0% 9 Decisions: whether to invest 10 1 if yes, O if no 1 11 12 Budget constraint Total cost Budget 13 14 $14.9 $15 15 16 Objective to maximize 17 Total NP $16.7