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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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