Question
ABC Corporation has a capital budget of $1,000,000 and is considering four investment projects: Project A: Initial Investment - $300,000, NPV - $50,000 Project B:
ABC Corporation has a capital budget of $1,000,000 and is considering four investment projects:
- Project A: Initial Investment - $300,000, NPV - $50,000
- Project B: Initial Investment - $400,000, NPV - $80,000
- Project C: Initial Investment - $200,000, NPV - $30,000
- Project D: Initial Investment - $350,000, NPV - $60,000
Due to capital rationing, the company can only undertake two projects. Rank the projects based on profitability and recommend the optimal investment.
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Introduction To Corporate Finance
Authors: Laurence Booth, Sean Cleary
3rd Edition
9781118300763
