Adapted from the book: Corporate Finance A Practical Approach by Michelle R. Clayman, Martin S., Fridson, and George H. Troughton, pages 1 18-120, The capital budgeting committee for Laroche Industries is meeting. Laroche is a North American conglomerate that has several divisions. Schoeman Products, a division of Laroche, has evaluated several investment projects and now must choose the subset of them that fits within its C$40 million capital budget. The outlays and NPVs for the six projects follow. Schoeman cannot buy fractional projects and must buy all or none of a project. The currency amounts are in millions of Canadian dollars., Project Outlay PV of Future Cash Flows NPV 13 J 1 31 J 44 J 2 0 15, 21 JJ 6J 4.5 J BJ 12 , 16.5 , 3J 4 J 10 J 13 , 3J 5 0 11 J 6 J 6 , 8 J 2 0 Schoeman wants to determine which subset of the six projects is optimal. A proposal comes from the division Society Services. The cash flows relating to the project is as follows: An outlay of C$190 million at time 0. Cash flows of C$40 million per year for years 1-10 if demand is high. Cash flows of C$20 million per year for years 1-10 if demand is low. The probability of high demand is 0.50, and the probability of low demand is 0.50. The required rate of return is 10 percent