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A company can spend a maximum of $10 million on new projects. The following projects are available. Which ones should they choose? Use the profitability
A company can spend a maximum of $10 million on new projects. The following projects are available. Which ones should they choose? Use the profitability index method to solve this problem.
Project | Initial Investment | NPV |
A | 1 million | 500,000 |
B | 3 million | 250,000 |
C | 2 million | 400,000 |
D | 4 million | 800,000 |
E | 3 million | 200,000 |
F | 2 million | 100,000 |
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