Question
Borgia Pharmaceuticals has $400,000 allocated for capital expenditures. Which of the following projects should the company accept to stay within the $400,000 budget? The opportunity
Borgia Pharmaceuticals has $400,000 allocated for capital expenditures. Which of the following projects should the company accept to stay within the $400,000 budget? The opportunity cost of capital for each project is 11%.
| Project | Investment($thousands) | NPV($thousands) | IRR(%) |
| 1 | 300 | 30 | 17.2 |
| 2 | 200 | 40 | 10.7 |
| 3 | 250 | 43 | 16.6 |
| 4 | 100 | 14 | 12.1 |
| 5 | 100 | 7 | 11.8 |
| 6 | 350 | 63 | 18 |
| 7 | 200 | 48 | 13.5 |
Group of answer choices
Projects 2 and 7
Projects 1 and 4
Projects 1 and 6
Projects 3 and 4
Projects 4, 5 and 7
Projects 1, 3 and 4
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Survey Of Economics, Principles, Applications, And Tools
Authors: Arthur O'Sullivan, Steven M. Sheffrin, Stephen J. Perez
5th Edition
0132556073, 978-0132556071
